Defaulting employers, IPEC agree on pension contributions payment plans

📅 Published: August 16, 2025

📰 Source: zimbabwesituation

Curated by AllZimNews.com

If they default on those plans, we will move to garnish them. ”Rising contribution arrears are causing sustainability concerns in the local pensions industry.

By the end of last year, the local pensions industry’s total membership, excluding beneficiaries, was 977 423.

Official data shows that as at the end of December 2024, pension contribution arrears – including those accumulated from prior years, stood at US$268 million, up from US$64,8 million. “Of these arrears, US$45 million was in relation to deductions being made on salaries being denominated in forex but not remitted by the employers,” added the regulator in its pensions report for the fourth quarter of 2024.

According to IPEC director of pensions, Mr Cuthbert Munjoma, most of the defaulting employers are parastatals.

The country’s pension funds are facing several significant challenges, including the unresolved loss of value issue, which has resulted in pensioners losing a significant portion of their savings; poor governance practices, inadequate skills and poor risk management and high contribution arrears as some employers are failing to remit pension contributions.

Local pension funds have also struggled to find effective investment strategies, leading to poor returns and further eroding the value of pension savings.

Presenting at the same conference, World Bank lead financial specialist Fiona Stewart highlighted that proper governance of pension funds is critical for effective investment portfolio diversification.

IPEC has also said pension benefits in the country are still below expectations. “Three years ago we introduced a benefits tracker, which tracks pension benefits on a monthly and quarterly basis,” said Mr Munjoma. “The benefits are not meeting reasonable expectations.

We do understand this is due to a number of factors such as adequacy of contributions and sustainability issues. “We have instituted a number of reforms, but there is room for holistic reforms. ”As at the end of last year, Zimbabwe’s pensions industry was made up of 967 registered occupational pension funds.

Of the 967 registered funds, 489 were active, constituting 50,6 percent of the industry’s total funds.

The remaining 478 funds were inactive, with 372 set for dissolution pending finalisation of the pre-2009 compensation.

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