Companies fail to remit ZWL$4.3 billion in pension funds

By Abigirl Tembo

Some local companies have been exposed for not remitting pension funds, with some institutions being owed more than ZWL4 billion Zimbabwean dollars amid growing calls for employers to prioritise the welfare of employees.

With attention being drawn to the welfare of the worker as the world commemorated Workers Day on the first of May, the Insurance and Pensions Commission (IPEC) has exposed local companies for failing to remit pensions saying this has an adverse impact on employees upon retirement.

“As IPEC we welcome and highly appreciate His Excellency, the President’s International Workers Day Speech, particularly his call for sponsoring employers to remit pension contributions. Indeed this has become a perennial problem which involves some sponsoring employers making paper deductions on payslips, but not remitting the actual pension contributions to the respective pension fund. So, as of 31 December 2021 the arrears stood at ZWL4.3 billion which has an adverse impact on adequacy of benefits. At retirement, some pension funds are paying very low benefits and partly for the reason that the sponsoring employers have not been remitting pensions contributions, so as IPEC we have been instituting a number of measures to ameliorate this challenge and address it so among the Key measures we have been implementing awareness programmes aimed at empowering trustees who are the custodians of pension funds’ assets. We have been urging them to institute measures to recover the arrears and these include entering into payment terms with the sponsoring employers who may be struggling to make the contributions at the end of the month. They enter into debt equity swops involving land in some instances they can also attach the employers assets for the purposes of meeting obligations relating to the pension fund,” said Mr Cuthbert Munjoma -Director Pension Supervision-IPEC.

This comes after President Emmerson Mnangagwa warned companies against short-changing their employees by failing to remit medical aid and pension funds.

In his Workers Day Message, President Mnangagwa called upon workers to expose such cases of corruption and maladministration.

“The incidence of non-remittance of payments for medical aid and pensions for workers by organisations will not be tolerate,” noted the President.

Pension funds are standard practice across the world and they incorporate any plan, fund, or scheme which provides retirement income.