Cabinet approves 2009 compensation

CaBinet has approved the framework for compensating policyholders and pension scheme members following the loss of insurance and pension values after conversion from the Zimbabwe dollar (Zimdollar to the united states dollar (usd) in 2009.

This followed the findings of the Justice smithled Commission of inquiry (Coi), which was appointed in 2015 to investigate the conversion of insurance and pension values from the Zimdollar to the usd.

in its findings, the Coi reported that some policyholders and pension scheme members had been prejudiced during the conversion process, as such needed to be compensated.

government appointed the insurance and pensions Commission (ipec), to spearhead implementation of the recommendations of the Coi, which included compensation.

to that end, ipec established a 2009 compensation working group, comprising ipec and representatives from the insurance and pensions industry to review the Coi findings and come up with recommendations.

This culminated in the drafting of the compensation framework, which was submitted to Cabinet for approval.

at its sitting of July 12 2022, Cabinet approved the recommended compensation framework, which included government’s commitment to provide a supplementary amount of us$175 million towards the compensation exercise.

You can read the excerpt of Cabinet’s press briefing on the compensation approval here.

after Cabinet’s approval of the compensation framework, ipeC convened a meeting with the industry where it unpacked the framework.

in his remarks during the meeting, Finance and economic development minister, professor mthuli ncube said there was need to fully implement the recommendations of the Commission of inquiry, including compensation.

in a speech read on his behalf by ipec Board Chaiperson, albert nduna, professor ncube said there was need for all stakeholders to work together instead of blame-shifting. to put our heads together and come up with a solution to this problem, which threatens the sustainability of the pension sector in Zimbabwe.

“insurance and pension savings rely heavily on confidence, if we do not compensate pensioners for the losses that occurred pre-2009, this will continue to dent confidence in the sector.”

ipec Commissioner, dr grace muradzikwa said finalising the compensation issue was critical.

“Without a doubt, this matter is the biggest pain point for our industry and we surely need to reach a stage where all industry queries relating to pre-2009 loss of values are resolved and pensioners/policyholders have good experiences as a result of our collective interventions,” she said.

“let us say no to elements amongst us who spearhead why it cannot be done without proffering the way forward. We cannot justify our relevance when the average pension as at march 2022 is ZW$14 929 against a minimum salary of ZW$110 000 plus us$82 and general salaries being paid in the industry. We are all going to be judged by how we address this issue.”