IPEC suspends six pension fund bosses

THE Insurance and Pensions Commission (IPEC) has, with immediate effect, suspended six executives of the Unified Councils Pension Fund (UCPF), which pools resources from all the country’s rural district council workers and some urban authorities, and nullified the appointment of its board of trustees.

UCPF has assets worth $34 million and a membership of over 4 000.

The industry regulator is presently conducting an “on-site inspection” of the Fund, which, according to preliminary information gathered, has made it “necessary and desirable to conduct an investigation”.

The affected members include fund manager Mr Benjamin Chiyangwa, Mr Brian Rusere (finance officer), Mr Peter Chiyangwa (benefits officer), Mrs Masceline Mbukwa (internal auditor), Ms Beular Musanhi (personal assistant) and Mrs Martha Kunaka (Bulawayo branch manager).

In a letter dated February 7, 2018 from IPEC’s commissioner of insurance, pensions and provident funds Mr Tendai Karonga, addressed to UCPF’s principal officer Mrs Lucy Furamera — who is also the secretary-general of the Association of Rural District Councils of Zimbabwe — the commission barred the six executives from accessing the premises of the Fund.

“We further advise that given the information in our possession from our preliminary findings of the inspection, it is our view that it is necessary and desirable to conduct an investigation in terms of Section 21 of the Pensions and Provident Funds Act (Chapter 24:09),” reads part of the letter.

“In a bid to facilitate the above-mentioned investigation, the Commission is hereby advising that, in terms of Section 4(2) of the Insurance and Pensions Commission Act [Chapter 24:21], as read with paragraph 21 of the first schedule of the same Act, the following individuals have been suspended with immediate effect: Benjamin Chiyangwa (fund manager); Mr Brain Rusere (finance officer); Mr Peter Chiyangwa (benefits officer); Mrs Masceline Mbukwa (internal auditor); Ms Beular Musanhi (personal assistant); and Mrs Martha Kunaka (Bulawayo branch manager).”

Though the suspended executives are not allowed to conduct any transactions on behalf of the Fund, they will continue to receive their contractual benefits.

Any other benefits that are not stipulated in their contracts shall cease forthwith .

In the interim, the Fund has been directed to appoint bank signatories from remaining staff members.

IPEC decided to nullify the term of office of UCPF’s board of trustees, which was reportedly unprocedurally extended by the former principal officer on January 26, 2016.

The regulations stipulate that the power to elect or appoint trustees is vested in the employer and fund members, and not the principal officer.

“One of our key preliminary findings is that, upon the expiration of the term of office of the board of trustees of the fund on December 31, 2015, the trustees were re-appointed by the then principal officer on January 26, 2016,” said Mr Karonga.

“In the above mentioned re-appointment, due process stipulated in Rule 2.3.4 of the Fund was not followed. This is notwithstanding the requirements of Section 7(3) of the Pension and Provident Funds Act, (Chapter 24:09), which stipulates that the rules of the pension fund shall be binding on the Fund, the participating employer, the members and officers of the fund.

“It, therefore, follows that the trustees’ purported re-appointment by the then principal officer is a legal nullity since in terms of rule 2.3.2, the power to elect/ appoint trustees is vested in the employer and fund members as opposed to the principal officer.

“In light of the above, the commission hereby directs all the trustees to cease acting in that capacity with immediate effect,” he said.

IPEC has since directed Mrs Furamera to facilitate the appointment of a legitimate board of trustees in accordance with the law.

But vetting documents of the proposed trustees will have to be submitted to the commission for approval before March 29.