‘Dollarisation inquiry flawed’

‘Dollarisation inquiry flawed’

Source: ‘Dollarisation inquiry flawed’ | The Herald May 17, 2017

Martin Kadzere Senior Business Reporter
THE Commission of Inquiry set up to probe the process used to convert pensions and insurance benefits after dollarisation in 2009 has completed its investigations amid concern from authorities that the report submitted contains a “lot of deficiencies”.

The commission, set up by President Mugabe, was tasked, among other issues to fully establish the total value of pensions, as at December 31, 2006 and as at March 31, 2009. It was also tasked to establish the value of old generation pension funds and the new generation pension funds as of December 31, 2006 and March 31, 2009.

Further, it was mandated to establish an objective criteria for the delineation of old generation pension and newer generation pensions in both instances while identifying appropriate criteria for assessing whether any pension fund members or insurance policy holders were prejudiced as well as establishing the extent of the prejudice.

Chaired by retired judge George Smith, the commission started investigations in August 2015 and was initially expected to produce the report a year later, but the investigation period was extended to March this year, as it had not completed its work.

The commission was scheduled to present a detailed explanation of its findings to the Ministry of Finance and Economic Development today, but the meeting was postponed as Minister Patrick Chinamasa is committed, sources close to the matter said. “What is clearly coming out of the report is the unbelievable extent of gross mismanagement of the industry and serious regulatory flaws,” said one source who requested not to be named. “It is recommended that the industry requires an overhaul.

“However, in terms of other key issues such as to do with determining the extent of the prejudice on the pensioners and policy holders in terms of reference 8, 9 and 10, were not properly done. There are huge gaps. We are told they used a qualitative approach.

“We believe the approach used was rather subjective and yet ranking the factors that caused the prejudice such as demutualisation, inflation and miscalculations of benefits required some kind of a quantitative approach. In order to rank them accurately, there is some need for some kind of calculations. The issue of demutualisation was also not touched and that alone makes the report very shallow.”

Another source said during the investigations, there were some divisions among commissioners over the governance framework of the commission and the strategy of execution. “The commission started in August 2015 but up March, it had only done public interviews. “This was also worsened by the fact that the insurance companies provided half backed information, which made the job for the commission difficult. They have now submitted the report to but our preliminary assessment shows a lot of gaps,” said the source.

Efforts to get a comment from Minister Chinamasa proved fruitless by the time of going to print.