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Unclaimed Pension Benefits Conundrum: Pensioners Feeling The Heat

By Tafadzwa Muranganwa
Taurai Musindo, a 70 year old pensioner from Goromonzi district in Mashonaland East Province has never received his pension benefits for the over 30 years he worked at a Harare based company, which has since stopped operations due to chocking financial constraints, despite pension contributions deducted monthly from his salary.

Today, he is struggling to eke out a living as he has not been able to claim his pension benefits or payouts. Exacerbation the situation is that although Musindo was on a good salary during his working days, he did not invest in income generating project which would have given him regular income in these trying times.

Musindo is not alone in this desperate situation as millions of dollars belonging to thousands of pensioners and their families ,who left their jobs unaware that they had unclaimed pension benefits owed to them, remain unclaimed. This means, Musindo and thousands of other pensioners across Zimbabwe could be living in poverty while unaware they are entitled to money that they have not claimed from their pension funds for years, which could have lost value by now , largely due to hyperinflation Zimbabwe is experiencing.

According to official data obtained from the regulator of the insurance and pensions sector, the Insurance and Pensions Commission ( IPEC) , the total value of unclaimed benefits skyrocketed to ZWL$7.24 billion in December 2022 from ZWL$2.97 billion reported on 31 December 2021, reflecting a 144% increase. The figure could have increased in the last six months as there seem to be little effort by pension funds administrators to track down beneficiaries of the unclaimed benefits.
Musindo said the situation was dire.
“For the over 30 years I worked for this company I was hoping to get ‘mudyandigere’ (pension benefits) but it’s been years and I haven’t received anything.

” What pains me is that my pension contributions were being deducted from my salary for all these years and supposedly remitted to our pension fund (name supplied), “a frustrated Musindo revealed.

At one occasion, Musindo attended a National Social Security Authority (NSSA) roadshow hoping to find how he could claim his pension but hit a brickwall, because he was contributing to a private occupational pension scheme and not NSSA.

” I thought NSSA was the answer to my predicament when I attended one of it’s road shows.

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“However, I was told that the authority doesn’t administer my kind of pension fund and they gave some name of an organisation but I didn’t even bother to pursue because I was frustrated,” Musindo said.

Musindo is not alone in this quandary, as thousands of pensioners across the country are like him.

Suffering from the same predicament is Raymond Mukandi, a former machinist at a mining company in Mhondoro district, Mashonaland West Province, who was forced into early retirement after a work-related accident.

He received compensation for the injuries and subsequent loss of work but has struggled to get his pension benefits.

“When I got injured at work the firm paid me a lump sum as compensation which I used to buy a plot where I am doing a poultry project. While I commend my former employer for that,I have not been successful in claiming my pension benefits which I think I am entitled to, “Mukandi said.

In Zimbabwe, private occupational pension schemes or pension funds are regulated by IPEC while other pension benefits are under the NSSA and Civil Service Pension Scheme. NSSA is under the preview of the Ministry of Public Service , Labour and Social Welfare.

Commenting on the matter , IPEC public relations manager, Lloyd Gumbo, said: “Fund members who are now in retirement but did not claim their pension benefits are entitled to claim their pension benefits from their pension funds if they contributed to private occupational pension schemes and did not claim their benefits.”

He added: “IPEC came up with website and SMS search engines where the names of members with unclaimed benefits are uploaded. Members or their dependents may search for members’ names on the IPEC website.

“If one finds a matching name, they then engage their pension fund or administrator to start the process of claiming their benefits.”

According to Gumbo, if money remains unclaimed for five years it will be transferred to the Guardian Fund.

“It is important to note that if money remains uncollected for five years since it became due for payment, it is remitted to the Guardian Fund, which is administered by the Master of the High Court, as per the requirement of the Administration of Estates Act [Chapter 6:01].

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“Therefore, claims can be lodged with the respective pension fund if the claimant is aware of the name of the fund or with the Guardian Fund. Alternatively, one can make use of the IPEC search engine to trace unclaimed benefits,”.
While there has been a sharp increase in the value of unclaimed benefit to more than ZWL$7 billion from about ZWL$2.97 billion in 2021, IPEC said there has been a reduction of membership for unclaimed benefits due to some measures that include transfers to the Guardian Fund.

” Whilst there has been an increase in the nominal value of unclaimed benefits, membership for unclaimed benefits declined from 151,253 to 111,542.

” The decline was attributed to the transfer of some unclaimed benefits to the Guardian Fund as well as the reclassification of some benefits following the issuance of Circular 28 of 2022, which clearly defined the category of members to be classified as unclaimed benefits, “adds IPEC.
Analyst, Ronald Zvendiya attributed the increase in the value of unclaimed pensions to a number of reasons including lack of knowledge on the part of pension scheme members, and poor record keeping by by pension funds and outdated records making it difficult for pension funds to trace the members, among many other possible reasons.

“Some pension funds do not educate members on their benefits and the process of claiming pension benefits.As a result, members do not have basic knowledge,” Zvendiya said.

He also blames pension funds for ‘poor classification of unclaimed benefits by administrators’.

“Some pension funds were treating unclaimed benefits as deferred pension benefits, therefore not reporting any unclaimed benefits, which affects the accuracy of data being reported by entities,”Zvendiya opines.

Zvendiya also attributed the problem to low payouts.

” The individual membership values reflected on some of the schedules submitted to the commission (IPEC) are very low, in some instances, as low as ZW$30.00.

” Such (low) values discourage members from claiming the benefits as the cost of claiming outweighs the benefit,”.

Consequently, IPEC and NSSA have rolled out awareness campaigns across the country as part of efforts to deal with the challenge of rising unclaimed benefits.

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