Venality, moral and political turpitude in social protection
Over the years, Zimbabwe Pensions and Insurance Trust (ZimPIRT) has interacted with various counterparties or other stakeholders in pension and insurance contracts on behalf of pensioners, pension fund members and policyholders . These counterparties/stakeholders include the Insurance and Pensions Commission (Ipec), the government represented by the Ministry of Finance, parliament and insurance companies and the administration of pension funds.
The apparent or declared positions of these latter parties on respecting all the rights of pensioners and insured persons have not been transparent or explicit, if at all. Government institutions would not act on appeals by pensioners against insurance companies and pension fund administrators, while the investigations and commissions of inquiry instituted were mixed up, becoming ineffective.
The retirees’ decisions to go to court and the progress of the retiree litigation to date, on the back of the parties’ seemingly unstated and declared positions, have been delayed by very long enforcement times in the courts, the reservation of judgments and legal arguments on technical aspects apart from the fundamental questions of the rights of pensioners provided for by the legislation.
On the whole, retirees consider the legal proceedings to be fraught with inefficiency and in circumstances conducive to corruption.
It has been categorically documented how insurance companies, pension/insurance fund administrators and policyholders have mismanaged pension and insurance funds and how they evade responsibility and accountability.
The report of Justice Smith’s commission of inquiry testifies to this, for example. Besides the failure in calculating benefits, gross mismanagement of pension funds has been established in accounting, solvency management, investment management, data management, fund governance (and regulation) pension, while retirees are pursuing the issue.
The discovery of gross mismanagement by the public has prompted insurance companies to cover up their failures and incompetence by using institutional financial power to bribe, capture and mislead authorities such as the regulator, the government (represented by the ministries concerned) and also the parliament.
It is evident that insurance companies and pension administrators have requested exclusive access from the Ministry of Finance and therefore from the regulator Ipec, while the main counterparties to pension and insurance schemes, here the main stakeholders, receive obviously prompt service, for all intents and purposes being deprived of meaningful access to those institutions overseeing the provision of pension and insurance services in Zimbabwe.
Pensioners, members of pension funds and insurance policy holders are considered here as key players in pension and insurance schemes having contributed for many years and are therefore the owners par excellence of pension funds and insurance. By using this strategy of exclusion, the Minister of Finance has, over the years, violated the principles and practices of good governance (among others) in the following ways:
By unilaterally appointing a regulatory board (Ipec board) that is completely in conflict with the interests of major stakeholders (i.e. pensioners, pension fund members and insurance policyholders) in the process ensuring that only the interests of insurance companies and pension fund administrators are taken into account.
By excluding key stakeholders in rolling out pension and insurance legislation, namely the Pension and Provident Funds Bill, the Insurance Act and the Ipec Act, in doing so brazenly planning mismanagement of pension and insurance funds in legislation, thus unfairly harming pension funds
By taking full advantage of an unsuspecting parliament
The unsuspecting parliament failed to establish the concerns of pensioners, pension fund members and policyholders as key players in the debate over pension and insurance legislation .
It is clear that Parliament has ignored representations of pensioners as key stakeholders, at the apparent request of insurance companies, Ipec and the finance minister, in caucus meetings that exclude pensioners.
The Pensions and Provident Funds Bill was thus passed in the National Assembly and the Senate in 2021 and 2022, respectively. This bill, in particular, had bad formulas that produced very small, inconsistent benefits (if at all). In the process, these provisions of the bill introduced the following irregularities:
violate the current provisions of the Pension and Provident Funds Act, read in conjunction with the Pension Fund Regulations,
attempt to legalize formulas that have been condemned by Justice Smith’s Inquiry and by court judgments
enshrine actuaries as the only determinants of these erroneous formulas, without calling into question the rationality and correctness of the methods. In this regard, it is evident that these provisions are an attempt by the three or four actuaries practicing in Zimbabwe to avoid accountability and to maintain (in an anti-competitive manner) the monopoly of advice to pension funds and insurance. These actuaries work for insurance companies, provide advice to pension funds, and have incompetently misled equally ignorant and incompetent management of pension and insurance service providers using the condemned formulas.
The bill also provided for minimum benefits for the same reasons as above.
The bill had many other flaws that violated international principles and practices in pension law, and therefore its regulations.
The Insurance Bill and the Ipec Bill were smuggled into the National Assembly despite pensioner representation that the bills were drafted without pensioner input, and drafted ruthlessly to exclude the fair representation of pensioners, members of pension funds and insured persons as key stakeholders.
Some members of the National Assembly fortunately opposed the Ipec bill. Serious lobbying and advocacy work must be done to repeal the fundamentally flawed Pension and Provident Funds Bill and to stop the other bills.
With regard to the involvement of Parliament in upholding the rights of pension and insurance schemes, the state of pension and insurance legislation in Zimbabwe as a foundation for the successful management of schemes by the schemes and of any successful litigation, Parliament has shown no involvement and initiative in drafting the bills submitted to it, (exclusively) by Ipec and the Ministry of Finance, nor has it demonstrates transparency and fairness in the deliberation and adoption of bills, with full knowledge of the facts.
Parliament has also become an instrument for the manipulation of pension and insurance legislation against pensioners, and for the protection of incompetent insurance companies, pension administrators and the three or three actuaries practicing in Zimbabwe.
It is now incumbent on retirees, pension fund members and policyholders to actively engage in serious lobbying, advocacy and litigation to stop the corrupt value chain in delivering all pensions rights and benefits. ‘insurance.
Lobbying and advocacy should aim to engage parliament and government so as to counter exclusive caucus meetings between these institutions on the one hand, and insurance companies and pension fund administrators on the other hand, to from which it appears that decisions are being made to pass fundamentally flawed pension and insurance legislation. This is the only way to save more than 20 billion US dollars saved by approximately two million retirees, members of pension funds and policyholders over many years (on average 25 years per member).
Tarusenga is the Managing Director of Zimbabwe Pensions and Insurance Rights Trust. The opinions expressed here are those of the author and do not represent those of the organizations the author represents.