HARARE – The Insurance and Pensions Commission (IPEC) says it introduced a mandatory certificate of proficiency qualification for trustees of retirement funds to curb widespread mismanagement of the investments.
Responding to questions at a breakfast meeting with the pensions industry, IPEC commissioner Tendai Karonga said any trustee who failed to acquire a certificate of proficiency would be disqualified from continuing to hold that position.
Karonga said the decision was arrived at after noting widespread poor record-keeping and general weak management of pension funds in Zimbabwe.
He said for example, there were rampart cases where decisions were made in the interests of employers at the expense of the pension fund and its members.
“It is the objective deduction of the Commission that most trustees we have were not operating at the expected level and may not be fit and proper to hold the position of trusteeship.
“Some have found themselves on the board of trustees as a result of them being vocal or loyal to the extent they lack expected expertise and independence commensurate with their office,” he said.
“In order to understand the motivating factors, the qualification should be understood not just for its benefits to the individual but to the industry as a whole. While acknowledging that each fund has situations that are unique to it, there are, and always will be principles that are of a general application.”
He added; “The Commission in realisation of the need to create a uniform and harmonized foundation from which the trustees can tap into for the benefit of their individual pension funds, saw it fit to have every trustee attain this qualification.”
Karonga said the board of trustees of any pension fund was mandated to manage the assets of the fund for the benefit of its members and beneficiaries.
Hence, he said, there was need for the board of trustees to be adequately capacitated to fulfil their role efficiently.
“Management of pension funds is a sector that is unique, especially given its goal of providing income to the member upon their retirement or death. It is not an industry that can be left to an ad-hoc application of systems in its management.
“It is necessary to have standard guidelines attained through the undergoing of the same training for all trustees so as to ensure there is harmonisation and consistency in the management of the funds,” he said. - New Ziana