THE government has allocated US$25 million for disbursement to pensioners who qualify pre-2009 compensation for loss of value.
In July 2022, government committed US$175 million to compensate pensioners and insurance policyholders for value that was lost during the changeover from the Zimdollar to the multi-currency system in 2009.
A Justice George Smith-led commission of inquiry constituted in 2015 discovered that some policyholders and pension scheme members were prejudiced by the conversion process to dollarisation and recommended that they be compensated.
Smith’s commission blamed the value erosion largely on poor regulatory enforcement and demonetisation of the local currency.
The commission also recommended compensation for the losses incurred during the period from 1996 to 2007 after many insurance companies short-changed their clients by taking advantage of the country’s inflationary environment.
Speaking in Parliament recently, Public Service, Labour and Social Welfare deputy minister Mercy Dinha told legislators that government had allocated US$25 million to compensate pensioners for the losses.
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“Treasury allocated the ZiG [now ZWG] equivalent to US$25 million to the Public Service Commission for disbursement to pensioners who qualify for the pre-2009 compensation for loss of value,” she said.
“The Public Service Commission paid the first batch of pensioners on July 26, 2024 while the second batch was paid on August 27, 2024. All compensation was paid in the local currency as directed by Treasury.”
Pensioners, who had worked for several years, had their pension values reduced to measly amounts, of up to US$0,80c and have not been compensated for the losses incurred during the inflationary period of 2008/9.
Speaking during the Insurance and Pensions Commission annual general meeting in July this year, Finance, Economic Development and Investment Promotion deputy minister David Kudakwashe Mnangagwa called on insurance companies and pension funds to bring the matter to a closure.
The government gazetted the Pension and Provident Funds (2009 Compensation) Regulations in September last year.