5 July 2014

Zimbabwe: Retrenchment Costs City U.S $5 Million

City of Harare has blown up about US$5 million in paying retirement and retrenchment packages for more than 700 employees. According to the minutes of the Human Resources and General Purposes Committee of June 6, US$4 884 440,19 was paid to the retired employees as salaries and terminal benefits as at May 31 this year.

The city says the rationalisation exercise through the retirement process will save US$16 712 622,84 annually.

"Council notes that the Local Authority Pension Fund has been engaged in respect of pension pay outs and an agreement has been reached on the funding model for outstanding contributions.

"Council notes that CABS has been engaged to extend the housing facility in Budiriro to all retirees wishing to purchase houses with a waiver of certain requirements," read part of the minutes.

The councillors approved the re-engagement of some retirees with critical skills on a contract basis subject to ministerial approval.

The councillors noted that the savings realised from downsizing would be channelled towards service delivery functions such as automation of grave digging, automated cleansers and automated grass cutters.

Council mandated the finance director to draw up a financial plan to utilise savings to be released to such areas as loan repayments and to meet the city's obligations to LAPF to ensure sustenance of pension payouts.

Council retired three directors while four were retrenched and five divisional managers were also retired.

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