The dire situation facing pensioners has once again been highlighted amid indications that nearly 90 percent of people who have retired are not receiving pension, owing to a number of issues that include poor corporate governance and mismanagement of funds.
Speaking on the sidelines of an Insurance and Pensions Commission (IPEC) training workshop for Pension Board of Trustees members held in Mutare, IPEC Director Pensions, Mr Josphat Kakwere highlighted the importance of sound management in restoring people’s confidence and ensuring that they get value from their contributions.
“Trustees play an important role to ensure the pension fund is managed efficiently. There is a need for a deliberate move to have an agreed replacement ratio in order to ensure pensioners get fair earnings. Sound management systems to administer the pension funds are also a determinant factor on what pensioners will get,” said Mr Kakwere.
Mr Kakwere also proposed that pension schemes invest in assets that include properties as a way of preserving the value of contributions at a time when only 12 percent of the retirees are eligible to access pensions.
“Pension schemes should preserve value by investing more on assets that are not affected by inflation and these include properties, equities and alternative investments,” he added.
Poor corporate governance, contribution arrears and high expense ratios for some pension funds remain some of the main challenges affecting the sector.