Pension report is flawed and lacks credibility: ZimPHRT

13 Apr, 2018 - 00:04 0 Views
Pension report is flawed and lacks credibility: ZimPHRT

eBusiness Weekly

Business Writer
The report released by the Commission of Inquiry appointed to investigate how pension and insurance benefits were paid out post dollarization is flawed and lacks credibility, according to lobby group the Zimbabwe Pension and Human Rights Trust.

In a report to the Parliament, ZimPIRT said the commission lacked a full grasp of the subject in some parts of the commission, implying the commission may not have had requisite skills and experience in pension and insurance. Martin Tarusenga, a director of ZimPIRT was one of the commissioners, but resigned before the report was released citing frustration from other board members who accused him of prematurely leaking some sensitive information to the media.

ZimPIRT said the conclusion and recommendations in certain instances ended up being sentimentally ill disposed without substantiated justification and also absolving the insurance companies and their regulators, Insurance and Pension Commission.

The methodologies used during the process appeared to be flawed hence the need to revamp the report.

The Commission of Inquiry was appointed in 2015 after pension fund values were badly eroded in values due to devastating hyperinflation, which soared to a record 500 billion percent in 2008, according to the International Monetary Fund.

The commission confirmed a huge loss of value to policy holders and pensioners and recommended compensation for the loss suffered. It established that while policyholders lost value during the conversion period, they have also been losing value throughout the investigation period between 1996 and 2014. In its report, the commission said high levels of inflation, currency debasing, dollarization conversion process and de-monetisation were the main reasons of the loss of value.

The Government commissioned the investigation in 2015 into how pensions and insurance benefits were paid out following a big outcry from pensioners and policy holders.

“It is ZimPIRT ‘s submission that … its findings were in some cases not comprehensive and at times were incomplete and incorrect and were not founded from any methodical substantial approaches,” it said. “The Commission report should have categorically and logically demonstrated how it established the findings.

“Where it does attempt to say how it established its findings, the Commission methodologies appear to be flawed and not substantiated by any established theories, principles and practices in the incumbent field as is required at law and in such inquiry work.”

ZimPIRT is of the opinion that the appointment and set up of the Commission lacked fitting factual background while flawed methodologies were used during the inquiry process.

ZimPIRT also noted that an injustice to pensioners and policy holders was committed by insurance companies and the regulation of pension and insurance provision in the country must be corrected. The Trust recommended that the inquiry must be revamped in parts where it is not complete or apparently not correct.

Such a revamp of the report should be done with the view to commence compensation in the shortest time possible. It recommended that the revamping of the report on compensation be overseen by an impartial body as opposed to having insurance companies and the Insurance and Pensions Commission (IPEC) as is recommended by the Commission.

ZimPIRT said insurance companies and IPEC could not form part of the compensation agents as they were subject to investigation by this Inquiry and found to have not acquitted themselves well. “Implementation by IPEC and the institutions introduces conflict of interest as it is the seemingly guilty that are left to compensate the aggrieved.

“This approach is unlikely to work without prior corrective accountability and responsibility measures especially when there is abundant evidence that the institutions have every intention to maintain the current prejudicial status quo,” said ZimPIRT.

However, owing to data limitations, the commission was unable to quantify the total prejudice suffered as adequate information was not availed for it to make determination.

The commission was also unable to quantify the exact loss attributable to factors for the loss. It rather relied on a qualitative approach of the judgment of the extent of the loss of value.

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