Will Zimbabwe’s pensioners finally get what they are owed?

There could be light at the end of the tunnel for tens of thousands of Zimbabwean pensioners who have been locked in a bitter standoff with insurance companies over the payment of benefits.

Since Zimbabwe adopted a multiple currency system in 2009, insurance firms have been clashing with pensioners and policyholders who are unhappy with the paltry benefits being disbursed to them.

The companies claim contributions had been wiped by inflation during the Zimbabwe dollar era, which reached an unbelievable 213 million per cent inflation at its peak in 2008.

Some pensioners, who have worked up to 50 years and are insurance policyholders, have been receiving as little as US$10 per month. Pension fund irregularities mean that there are also thousands of pensioners who are not being paid anything at all.

The former Finance Minister Tendai Biti, who was succeeded by Patrick Chinamasa (who was himself, briefly, acting Finance Minister in 2009) a few weeks ago, recently wrote to the Insurance and Pensions Commission (IPEC) – the insurance regulatory body – demanding an explanation for the meagre benefits.

“It is my profound hope that the incoming Finance Minister will make a follow up with IPEC concerning the paltry pension pay-outs.

“A lot of people have lost their contributions and ultimately their savings to the pensions and insurance companies. The IPEC has got to respond to the allegations that are being levelled against it,” Biti told Equal Times.

He said contributions for pension and insurance were binding contracts that had to be honoured.

“The companies say that the contributions were wiped out by inflation, but they’re not considering the true value of contributions and assets before the hyperinflation period.”

Biti said he was one of the affected contributors. He took out a policy in 1994 with an assured sum of Z$50 million (about US$20,000 the exchange rate of the time), but to date, he has never received a cent.


President Robert Mugabe’s controversial land reform programme had a devastating impact on Zimbabwe’s economy. At one point, Zimbabwe was identified as one of the worst performing economies in the world, and in 2009 it abandoned the Zimbabwe dollar in favour of the US dollar, the South African rand and the British pound , which are still in use today.

Martin Tarusenga, General Manager of the Zimbabwe Pensions and Insurance Rights NGO, told Equal Times that it had sought the government’s intervention in the impasse as all appeals to IPEC had been ignored. Tarusenga said the commission must urgently execute its key regulatory role to protect consumers of pensions and insurance services, but had so far failed to do so.

“The problem is that insurance companies are not accepting claims by our members, while others are offering to pay in the defunct Zimbabwe dollar, which is unacceptable.”

He said there were loopholes in acts which govern the pension industry, which prejudice clients and these needed urgent redress. “We’ve since advocated the setting up of a new IPEC board to address some of these pressing issues,” said Tarusenga. “The current board has many insurance executives, so there is conflict of interest when it comes to addressing our grievances.”

He reiterated the need for the astute administration of pension funds to safeguard workers from exploitation, and he also said that insurance companies must be held liable for the rightful payment of pensions and benefits assured.

“The fact is, it is a contract between workers and the companies, where the latter pledges to look after their monies diligently,” said Tarusenga. “It is not only mischievous, but criminal for the companies to renege from paying benefits with a corresponding value to the contributions made.”


Jacob Waerera, a Harare-based trade unionist, is incredulous that no insurance company in Zimbabwe has ever been brought to book over irregularities in the administration of pension funds.

“It is not enough for pension companies to cite inflation because it was a process – which they saw coming – and not an event that took them by surprise,” said Waerera.

He said inflation risk could have been managed by a process of indexation, a technique used to adjust income payments by means of a price index, in order to maintain the purchasing power after inflation.

Japhet Moyo, Secretary General of the Zimbabwe Congress of Trade Unions (ZCTU), agrees and told Equal Times that the ZCTU were the first to raise a complaint with Biti over pension pay-outs.

"The insurance companies and pension funds argue that the workers’ contributions were wiped out by hyperinflation, yet they have invested the monies in properties which have never depreciated in value," said Moyo.

He is calling for an amendment of the Pension and Providence Act so that workers can have more say in how their money is handled by pension houses and insurance companies. Moyo also called for the reconstitution of IPEC board, which he accused of failing to address pensioners’ grievances.

Wellington Chibebe, who is currently the Deputy General Secretary of the International Trade Union Confederation (ITUC) but was Secretary General of ZCTU at the time of the introduction of the multicurrency system, is critical of the government’s belated intervention.

“Biti was appointed Minister of Finance in March 2009 but did nothing to address this problem. We [the ZCTU] approached him then but he was adamant that there were no plans to compensate those who lost their money, not only through hyperinflation but dollarisation as well.”

Chibebe says it is “a known fact” that about 75 per cent of immovable commercial property in Zimbabwe belongs to the pension funds and insurance companies.

“This is against the background of grinding poverty affecting insurance holders and pensioners,” he said. As a result, he urges Biti and Chinamasa to “own up to the facts and suggest a way forward rather than shedding crocodile tears.”