There was an increase in pension complaints and unclaimed benefits in the first quarter of this year, the latest Pensions Industry Report has revealed, underscoring the need for immediate action and improved compliance for sustainability and efficiency of the pension systems.
According to the Pensions Industry Report for the quarter ending 31 March 2024, which highlights the growing challenges faced by the pensions industry, unpaid benefits top the list of complaints.
The data compiled by the Insurance and Pensions Commission (IPEC) shows a sharp increase in pension-related complaints, with a total of 57 complaints received in the first quarter of 2024. This marks a significant rise from the 30 complaints reported in the previous quarter.
Out of these, 18 complaints were registered in January, 10 in February, and 29 in March.
The most common issue among these complaints was unpaid pension benefits, which accounted for 24 complaints.
Although the number of these complaints rose from the previous quarter, their proportion of the total complaints decreased from 60 percent to 42 percent.
Other prevalent complaints included delays in payment of benefits and issues related to pre-2009 compensation, each constituting 12 percent of the total complaints.
The remaining complaints covered a range of issues such as inadequate benefits, requests for payments in US dollars, lack of information, corporate governance concerns, and full commutations .
Out of the 57 complaints received in the first quarter, only 17 were successfully resolved, leaving 43 complaints pending.
In comparison, a total of 92 complaints were resolved from the first quarter of 2023 to the fourth quarter of 2023 .
The report also indicates a significant increase in unclaimed benefits. As of 31 March 2024, unclaimed benefits amounted to ZW$66.6 billion (US$3.02 million), a notable rise from ZW$41 billion (US$1.8 million) reported on 31 March 2023.
This represents a nominal increase of 62.4 percent and a 67.7 percent increase in US dollar terms. Despite the increase in the value of unclaimed benefits, the total membership with unclaimed benefits decreased by 7.2 percent from 105 393 members to 98 316 members .
Stand-alone funds were found to have the highest amounts of unclaimed benefits, accounting for 85 percent of the industry’s total.
The age analysis of these unclaimed benefits revealed that those outstanding for over 10 years constituted 85 percent of the total liability .
The report underscores the need for funds and administrators to comply with statutory requirements, including the remittance of unclaimed benefits over five years to the Guardian Fund.
This compliance is crucial to make sure that these funds are appropriately managed and utilised.
The report brings to light critical issues within the pensions industry, with IPEC noting that addressing these challenges will require concerted efforts from all stakeholders to ensure the sustainability and efficiency of the pension systems in place.
