Michael Magoronga, Midlands Correspondent
THE Insurance and Pensions Commission (Ipec) says unclaimed pension benefits jumped to $616,5 million as at December 2020 from $30,83 million in the prior year driven by revaluation gains and previously omitted unclaimed benefits.
In its fourth quarter pensions industry report, the regulator expressed concern that thousands of people could be wallowing in poverty and yet their pension benefits lie idle.
It has since directed sector players to put their house in order and scale-up awareness interventions to ensure pensioners benefit from their claims.
“The commission calls upon the industry to sanitise their data to improve integrity. The industry is urged to enhance awareness initiatives and come up with measures to track beneficiaries of unclaimed benefits,” said Ipec.
As part of awareness measures, the regulator has also engaged journalists from across the country for continuing training on insurance and pensions reporting.
It says teams were also being dispatched to reach out to rural communities where they educate citizens about pension schemes and how those who retired or lost their jobs could access unclaimed benefits.
The interventions come as the pensions industry has recorded a major increase in income for the year 2020.
“Total income for the industry for the year 2020 was $79,21 billion compared to $22,27 billion reported in 2019. The income was mainly driven by fair value gains interest on investments and contributions, which constituted a combined proportion of 93,88 percent,” read the report.
The number of registered pension funds in the industry stood at 967 as at 31 December 2020 compared to 1 067 reported in the prior comparable period.
Of the 967 registered funds, the report indicates that 936 were defined contribution schemes constituting 96,79 percent of the industry’s funds.
Total membership, excluding beneficiaries, rose from 808 635 to 881 330 for the period under review translating to an increase of 8,99 percent. Meanwhile, the total asset base for the industry increased from $29,55 billion to $110,2 billion.
The jump in asset base value was attributed to revaluation of investment property and quoted equities, which increased by 308,14 percent and 667,14 percent respectively.
The report, however, notes that the Covid-19 outbreak, which led to mandatory lockdowns, had a negative impact on the industry as it disrupted business operations and income streams.
“The effects of the pandemic have exacerbated the problem of policy lapses and delayed payment of pensions contributions,” said Ipec.
“The new normal also brought about additional operational costs for insurers and pension funds as they sought to capacitate staff to work remotely.”
The industry report is released every quarter and highlights major developments in the pension sector. It is based on unaudited financial statements of insured, stand alone, self-administered funds, as well as self-administered funds.