Zimbabwe’s pensioners spooked

Source: Zimbabwe’s pensioners spooked | The Financial Gazette May 28, 2016

By Ray Ndlovu, Assistant Bureau Chief

EIGHT years after Zimbabweans lost lifetime savings when the local currency succumbed to hyperinflation, fresh fears of a repeat of that episode abound.
Worst hit by the demise of the Zimbabwe dollar were obviously, pensioners who transited into the multi-currency system with very little to show for their sweat.
Naturally, talk about the introduction of bond notes has sent chills down the pensioners’ spines.
It is suspected that by injecting the bond notes into the monetary system, the central bank is bringing back the despised Zimbabwe dollar through the back door.
Owing to the on-going cash crisis, pensioners have been struggling to access their monthly living allowances through the banks.
And with Treasury adjusting to the cash crunch by deferring pay dates for public servants, pensioners have been pushed to the back of the queue.
Government, the largest employer with about 500 000 workers on its payroll, has the largest number of pensioners on its books.
These have tasted what it means not to receive their meagre pensions on time.
Equally feeling the heat are fund managers who stand accused of prejudicing the country’s senior citizens by not paying them living pensions.
Pension fund managers are closely weighing their options as the country begins its countdown to the introduction of bond notes.
Economist, Bongani Ngwenya, said fears of a repeat of what happened in 2008 are justifiable given what is happening in the country’s economy.
“Who knows, there might come a time when pension fund managers are not able to pay out anything at all,” said Ngwenya.
He believes that while losses may not be on the scale of the 2008 devastation, the situation might be kept under control if the Reserve Bank of Zimbabwe maintains the multi-currency system.
A pension fund manager who declined to be named this week said industry, as a whole, was apprehensive and is adopting a wait-and-see attitude.
“On the Zimbabwe Stock Exchange (ZSE), a defensive approach has been adopted and has seen the selection of blue-chip stocks, such as Delta Beverages and Econet Wireless becoming the norm,” he said.
Itai Chirume, executive director of MMC Capital, said fund managers have little safe havens to turn to in order to protect pensioners.
“Even if it means that they buy into the properties and equities market, the problem is not solved as at some point they will need to liquidate those assets. We have not yet seen people from the pension space shift to equity and properties, people want to wait and see what pans out,” said Chirume.
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