3 Manicaland RDCs fail to remit pension contributions

THREE rural district councils in Manicaland have been named and shamed for being among 50 councils failing to remit employee pension contributions to the United Council Pensions Funds (UCPF).

The three — Mutasa Rural District Council, Chipinge RDC and Chimanimani RDC — owe UCPF a total of ZWL$1 870 801 426.

This is according to a list released last week by Insurance and Pensions Commission (IPEC), which regulates insurances and pensions in the country.

The regulatory body implored the entities to put measures to ensure the remittance of outstanding contributions.

This call to action comes after local authorities and energy-focused firms, among other entities that appeared in the top 50 list are reportedly owing $179 billion in outstanding pension contributions.

Mutasa RDC appeared on Number 24, and owing about ZWL$764 million, while Chipinge RDC (ZWL$682 million) and Chimanimani RDC (ZWL$424 million) were ranked in the bottom 10.

Mutasa RDC acting chief executive officer, Engineer Tendai Danana said they have since initiated a payment plan with IPEC. He said they are committed to clearing the pension arrears and ensure that employee’s contributions are remitted on time.

“We are aiming to eliminate all outstanding pension arrears by June, while consistently meeting our monthly obligations. We prioritise the welfare of both current employees and retirees, recognising that our own retirement is inevitable, hence our commitment to clear the arrears by June,” he said.

Engineer Danana said the arrears accumulated over the years, and assured employees that council is implementing measures to prevent any future accrual of pension arrears. Chipinge RDC chief executive officer, Mr Blessing Mamvosha said he was not privy to the IPEC public notice, and needed time to confirm accuracy, dates and amount the regulatory body claims his council owes.

Employers who deduct pension contributions are required in terms of Section 16(3) of the Pensions and Provident Funds Act, Chapter 24:32, to remit such contributions to the pension fund 14 days after the end of the month the contribution is payable.

In its public notice, IPEC said the call to action underscores the critical need for proactive steps to address any lapses in contribution payments by employers, ensuring the protection and stability of the pension and insurance sectors.

“IPEC publishes this notice in the public interest.

“The purpose of this notice is to inform members belonging to these funds as part of the commission’s disclosures. IPEC calls upon members of boards of the affected pension funds to put measures in place to ensure that the defaulting employers remit outstanding contributions for the benefit of their pension scheme members.

In addition, labour organisations are urged to engage the employers who are not remitting pension contributions to protect members against old age poverty.

“Following the gazetting of the new Pensions and Provident Funds Act (Chapter 24:32) into law in September 2022, employers and members of boards are urged to familiarise themselves with the deterrent provisions of the new Act regarding pension contributions,” reads the statement.

According to the new Pensions and Provident Funds Act, any participating employer who fails to remit contributions within 14 days shall be guilty of an offence and liable to a category one civil penalty.

“IPEC has extensive investigative and regulatory oversight powers including power to require information, search and seizure.

“Where a participating employer fails to comply with a direction made by the commissioner in terms of subsection six, the commissioner shall direct the bank of such employer to remit outstanding pension contributions to the fund, either by way of a single instalment or such number of instalments as approved,” reads the Act.