THERE is need to review laws and legal instruments to break an impasse between pensioners and insurance companies to ensure that insurers honour pension claims, a pensions' rights organisation has said.
Since the introduction of the multi-currency regime four years ago, the government is yet to address the Zimbabwean dollar liabilities, consequently eroding the values of funds invested by millions of people.
Pensioners have been negatively affected as their hard-earned monies disappeared overnight, leading to a number of them lodging claims about their investments.
Zimbabwe Pensions and Insurance Rights (Zimpirt) general manager, Martin Tarusenga said despite protracted appeals made last year by the organisation to the Insurance and Pensions Commission (Ipec), which regulates the sector, they have not yielded any results.
In a letter to Finance minister Tendai Biti last year, Zimpirt appealed to the minister to instruct the Ipec Board and the commissioner of the body to act transparently and appropriately on specific appeals made to the Ipec administration.
It also requested for Biti to compel service providers to consider benefit under-entitlement claims made to them by individuals and organisations.
". . . to disclose the real reasons, to the public, for de-registering pension funds on a large scale in 2011, why the pension funds had been registered in the first place, and whether or not pensioners and pension fund members associated with these de-registered funds did not suffer rights violations", reads part of the letter of appeal.
But Tarusenga said follow-ups with Biti revealed that Ipec had not responded to the minister with regards to why insurance companies were not complying with the rights of pensioners.
"The currency transition argument is far from valid for various reasons highlighted in the past, in particular the need for insurance companies to have complied, all along, with the fundamental principles of pension and insurance service provision," said Tarusenga.
The complaints against insurance companies and related pension funds are that insurance companies were seriously prejudicing pensioners by paying out benefits far less than the outlays they placed with them, which is a breach of contractual undertakings.
Biti confirmed that such an investigation was underway.
But said Tarusenga: "No details were given about this investigation, contrary to established practice for public enquiries. This investigation became a guarded secret of Ipec."
Pensioners argue that they are being paid paltry amounts of money, yet the same service providers bought assets that are presently sustaining lavish lifestyles for executives of such service providers.
Binding contracts to be honoured
Biti has said contributions for pension and insurance were binding contracts that had to be honoured.
He last year took a swipe at insurance companies that argued that contributions were wiped out by inflation without considering the true value of contributions and assets before the hyper-inflation period.
Biti then tasked Ipec to respond to allegations levelled against it by various bodies representing pensioners and insurance contract holders.
Biti announced in early November 2012 that he had taken steps to hold Ipec to account.