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‘We are navigating through a vexing terrain’

Executive for the Life business. Holds a BSc (Honors) degree in actuarial mathematics and Statistics from Heriott Watt university, an mBa from the university of Cape town. Fellow of the Institute and Faculty of actuaries (uK). Council member Zimbabwe. of

The Zimbabwe Association of Pension Funds (ZAPF) last week held its 47th annual conference in Victoria Falls. The conference which was held under the theme *The Zimbabwean retirement industry post the pandemic* touched on a number of issues, including reviewing current insurance models. Our senior business reporter Melody Chikono (MC), spoke to ZAPF chairperson Rutendo Magorimbo (RM, pictured) about the trajectory that the industry would be charting after the conference. Here is how their discussion turned out:

• actuarial

Society of value. I think the government has been responsive to that. We really need to market the country so that we can get new money coming in. Having said that, I still think we can use available resources to drive those investments, recapitalise companies rather than wait for foreign direct investment (FDI). If we use the capital we have, we can grow the economy without depending on FDI.

MC: And you have indicated that pension funds are receiving less and less.

RM: I don’t have the numbers off hand. But what I can tell you is that because of an uncertain environment the remuneration structure has changed. Pension fund rules normally base amounts they get on the pensionable salary. Previously, 90% of your total pay would be pensionable with 10% being allowances. What we see today is that probably 20% is pensionable and 80 % is non-pensionable allowances.

Because it's non-pensionable, what you are now putting into the pension fund is 5% of a very small amount because most employers do not want to commit. We have coined the phrase economic hardship allowances and we have said those allowances can be taken away if things improve. The fact that they will be taken away means it can’t contribute to your pension and that is why it has been dwindling over time. Let’s have a relook. Can employers not change the base?

MC: Most pension funds have properties that are experiencing huge voids. What damage has been inflicted by Covid-19?

RM: Covid-19 came but the truth is that we were already in a crisis. Even before the pandemic, the issue of voids was already there. The reason for voids is that companies are shrinking. When they are retrenching, they require less space. Yes, when Covid-19 came, people worked from home. But for me, the issue is the economic crisis. When the economy is vibrant, you have demand for warehouse office space.

MC: What is your outlook association?

RM: I have spoken about rebuilding, and rebuilding means all Zimbabweans must participate. As Zimbabweans we complain a lot. Can we do what we do as individuals, politics aside? At an individual level if I’m not contributing pensions and I’m not saving, I can’t expect the country to prosper.

If we are able to pull investments and the contributions and direct how we want to invest, a lot can be done. We can invest in hospitals, or invest into re-capitalising companies but only as a collective effort. as an

IN-DEPTH INTERVIEW

en-zw

2022-05-27T07:00:00.0000000Z

2022-05-27T07:00:00.0000000Z

https://digital.alphamedia.co.zw/article/281608129056238

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