THE Insurance and Pensions Commission (Ipec) has expressed concern over ongoing data inconsistencies within Zimbabwe’s pension system, warning that the problem continues to undermine benefit calculations and the overall credibility of industry reporting.
Benefit calculations determine how much money a member will receive upon retirement or other qualifying events like disability or death.
In its second-quarter pensions report, Ipec highlighted the need for pension funds and administrators to ensure that member and pensioner records are accurate, complete, and regularly updated.
Data integrity issues have been flagged for causing delays in the compensation of pensioners who lost their retirement packages following the 2008/09 hyperinflationary period.
Ipec’s pensions and life director Cuthbert Munjoma told NewsDay Business that the commission had observed recurring discrepancies in the quarterly returns submitted by pension funds and administrators.
These errors, he said, were particularly evident in membership categorisation, entrance and exit records, and reported asset values.
“Data inconsistencies are mainly picked from quarterly returns that are submitted to the commission. These range from membership categorisation into active or deferred, membership entrance and exit, and asset values,” Munjoma said.
He said these inaccuracies, though often administrative, could have significant implications.
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“They may result in underpayment of benefits, which, however, will be corrected through annual reconciliations informed by audited financial and actuarial valuations,” Munjoma said.
He identified membership categorisation as one of the most persistent problem areas.
“Members are sometimes reported under the wrong categories, for example, unclaimed members being recorded as deferred members even if their benefits have fallen due,” Munjoma said.
“This results in underestimation of members with unclaimed benefits.”
He also pointed to timing differences between asset managers and fund administrators as another source of inaccuracy.
“Our returns are due 14 days after the end of the quarter,” Munjoma said.
“At this time, some administrators would not yet have received updated reports from the funds’ asset managers, resulting in under-reporting or over-reporting of assets.”
These inconsistencies, according to Ipec, pose risks to the integrity of the entire pension ecosystem, as they affect not only the accuracy of member records but also the transparency of the sector’s financial position.
Munjoma said Ipec had launched several initiatives aimed at improving data integrity and promoting more accurate reporting.
He added that the commission recently developed a new reporting template that highlighted common areas of error and helped institutions identify and address inconsistencies before submission.
“The industry was also capacitated through training to check for these inconsistencies before submitting them to the commission,” Munjoma said.
He said Ipec was taking a technological approach to modernise supervision and improve efficiency.
“The commission is in the process of acquiring an electronic supervisory system, which will enable us to get data from the regulated entities in real time, as the supervisory system will be connected to their systems,” Munjoma said.
Ipec is also intensifying its enforcement of record-keeping standards across both insurance and pension entities.
Poor record keeping by pension funds themselves or outdated records have, over time, resulted in vital multi-million-dollar pension benefits going unclaimed at the country’s pension funds.
During the second quarter, the number of members with unclaimed benefits increased by 0,74% to 100 354 from 99 615 in the prior quarter.
Unclaimed benefit liabilities were equivalent to US$15,9 million (ZiG406,68 million).
