THE Insurance and Pensions Commission (Ipec) is set to establish an information technology (IT) system to house all pension funds in the country, tackling data integrity issues plaguing the industry.
Currently, players spend over US$2 million annually maintaining unused systems.
Despite having systems that enhance data efficiency, they remain largely redundant, and IT sharing has been a challenge. This has hindered efforts like the 2009 compensation programme.
Speaking on the sidelines of the Zimbabwe Association of Pension Funds 5th edition of the Principal Officers and Chairman’s Convention held in Bulawayo this week, Ipec pensions and life director, Cuthbert Munjoma, noted that the industry’s data-intensive nature required easy access to information.
“The industry is data intensive, and we are supposed to be able to easily find information such as when did one start working? How much did they contribute? What was the investment return? Typical of your bank account, because most funds are not easy to find contributions,” Munjoma told businessdigest.
“So, what we observed was that prior to the establishment of Ipec, there was no proper end of a takeover. In the case of a transfer fund business, from one administrator to the other, they would just wrestle business.”
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In the context of IT systems, “no proper end of a takeover” refers to a situation where a transition or migration of one system, platform, or software to another (often due to a merger, acquisition, or system update) is not completed or resolved correctly.
Munjoma explained that prior to Ipec’s establishment, there was no proper handover and takeover due to lack of data.
“So, they would just do it without regulatory approval and records were missing from there. Some administrators were taking data as their intellectual property, to say, ‘that’s my data!’ We have had pension fund administrators who are not allowed to give to others when it’s not their data,” he said.
“All those processes are supposed to be subjected to regulatory approval. What we are now doing is, should there be any change of administrator — and it has to be approved, there must be a data audit.
Ipec plans to draw from other countries to create a unified system for pension funds, connected to a supervisory system.
He said the system could even be sold to the government and onboard the National Social Security Authority (Nssa) pension as well as the government pension fund.
Munjoma stated, “If you check in South Africa, big funds such as Eskom pension fund, it is a US$16 billion pension fund, whereas our whole industry is a US$2 billion pension fund. Effectively, we can all be on one system and it is possible. It is happening in other big countries.
“So, we think that should be the solution. It has to be national infrastructure.
“You will find that Nssa is also experiencing the same data integrity issues, and we need a national solution to this.”
The system aims to address portability issues and operate on a not-for-profit basis.