THE Insurance and Pensions Commission (Ipec) will this week disqualify pensions fund trustees without minimum qualifications and those that exceeded their term limits, as it moves to enhance corporate governance practices NewsDay Business understands that the move comes as there are indications that over 37% of the board of fund members have been in office for more than 10 years with over 18% lacking proper qualifications.
Ipec had given the offending trustees grace periods to vacate their positions after preliminary findings from offsite inspections revealed that some had served for between 10 and 20 years, in breach of governance procedures.
Ipec pensions and life director Cuthbert Munjoma this week said the regulator had now obtained permissions to disqualify the offending trustee.
Munjoma was speaking during the Zimbabwe Association of Pension Funds (ZAPF) 5th edition of the Principal Officers and Chairpersons Convention in Bulawayo that began on Monday. It ends today.
“We are taking this aspect, and it is important to notice that about 80% of the boards of funds represented here do not have the minimum qualifications,” he said.
“We’ve given them a long rope since last year giving them time to rectify and we’ve come to a point where we now disqualify [them].”
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A board of trustees presides over a private business, non-profit organisation or charitable foundation, whereas a board of directors may preside over a public corporation, private business or non-profit organisation.
Pension funds have a board of trustees appointed or elected to manage a fund on behalf of and for the benefit of fund members.
“So, I think starting last week and this week, some of you will be disqualified and the message is the funds have to replace those that are not fit and proper within this level of timeline. So, we’ll be engaging with respective funds that are affected,” Munjoma said.
“We are also concerned about members who’ve been in office for more than 10 years and as you recall the new pension programme, funds that came into effect on September 2, 2022 provided for 10 years and those that served 10 years before are not eligible for reappointment.
“So, we’ve noted some perennial terms of office that would then automatically disqualify them and I think we’ll be receiving letters of disqualifications again starting this week.”
He said the idea was to enhance governance and oversight on these pension funds.
“We are calling on professional development to ensure that the issue of professional development is attended to,” Munjoma said.
Statutory Instrument 8 of 2017 introduced, two-term limits for a pension fund board.
On the sidelines of the convention, Munjoma said the Pensions and Provident Fund Act, which came into force in September 2022, provided that if anyone had already served previous terms before, they were no longer eligible for reappointment.
“But should you then be subject to another reappointment, you are disqualified. So, we now have some in the perennial terms of office, those who were in office some 25 years, 30 years. We have written to the respective funds and we are proceeding to disqualify,” he said.
“We are going to disqualify again those who have been in office for a continuous period of more than 10 years. We’ve identified the respective members and we are proceeding to disqualify them from office. Once it’s done, we close the governance gap by ensuring elections are done as soon as possible.”
Munjoma said the law also provided for minimum qualifications, with the industry using the certificate of proficiency (COP), a course which can be done in six months and offered by the Insurance Institute of Zimbabwe and ZAPF.
“We noted about 18% are not compliant with that. So, we issued them some time to comply late last year. We gave them up to May. Why May? Because they write examinations around April for the COP,” he added.
“So, some have not complied, and we are proceeding to disqualify them from being board members.”