Bulawayo (New Ziana)- Unclaimed pension benefits have declined marginally from $ZW$4,3 billion as of the first quarter which ended June 30 this year compared to ZW$4,4 billion reported as of March 31 this year, amid concerns by the industry regulator at the huge amounts lying idle in various accounts.
In its 2022 Second Quarter Report, the Insurance and Pensions Commission (IPEC) said total membership with unclaimed benefits for the same period also declined marginally to 106 000 compared to about 146 000 as of March 31 this year.
“The decline in unclaimed benefits was due to payments made to members as well as transfers to the Guardian’s Fund by some funds,” the Commission said.
The Guardian’s Fund is a fund under the Master of High Court to which benefits which are not claimed for more than 10 years should be remitted.
IPEC also attributed the drop to proper classification of members following issuance of the Revised Guidelines on Unclaimed and suspended pensions, and the introduction of the revised reporting template.
The value paid to members and the Guardian’s Fund were as follows; National Railways of Zimbabwe (NRZ) ZW$2 944 881,24; Comarton ZW$3 180 370,82;(Communications and Allied Industries Pension Fund (CAIPF) ZW$374 223,07; Mining Industry Pension Fund (MIPF) ZW$1 832 578,47 bringing the disbursement to a total of ZW$8 332 053,87.
In its report, the IPEC also noted that Stand-Alone funds had the largest proportion of unclaimed benefits.
Stand Alone pension funds are self-administered funds, which own and control their administrations structures, for example having own employees operating fund.
“On the other hand, insured funds and self-administered funds accounted for eight percent and two percent respectively,” noted the Commission.
Insured Funds are funds that are administered by life assurance companies. The assets of the funds are in the name of the insurance company while self-administered funds are pension funds under dedicated fund administrators. The assets of the funds are in the respective names of the fund.
The Commission revealed that about 86 percent of unclaimed benefits have accrued over a period in excess of 10 years, raising concerns over traceability of the members entitled to the amount.
“This also raises compliance issues given the requirement to transfer unclaimed benefits aged over five years to Guardian Funds under Master of High Court. About 95 percent of unclaimed benefits have accrued over 10 years raising concern over the ability of funds to trace and pay the eligible members,” it said.
The Commission also said out of ZW$3,8 billion in unclaimed benefits under the Stand-Alone funds, ZW$3,4 billion due to 89 088 members was attributed to the Clothing Industry Pension Fund alone.
“The unclaimed benefit have remained due for over 14 years raising concerns on the traceability of members. On insured funds, the bulk of the unclaimed funds were aged below five years accounting to 78 percent of unclaimed benefits. This points to the continued challenge of data integrity and the Commission will continue to engage the Funds to ensure that members are traced and paid their benefits.”
The value of unclaimed benefits for members under Self-Administered funds was about ZW$107 million owed to 942 members, the IPEC said.
The Commission said it was conducting an onsite inspection focusing on data integrity to establish the possible cause of such high unclaimed benefits and find ways to significantly reduce its occurrence.