Local authorities owe LAPF $235m

LOCAL authorities are owing the Local Authorities Pension Fund (LAPF) more than $235 million in unremitted pension for their employees, a situation that is crippling the fund.

As a result, the pension fund owes pensioners and benefit claims beneficiaries more the $46 million. LAPF board chair Ms Elizabeth Gwatipedza told Sunday News that the fund which has more than 13 000 members was struggling to meet its obligations.

“Currently the fund owes pensioners and benefit claims beneficiaries in excess of $46 million, the Fund relies heavily on contributions from members of local authorities to settle pension benefits, which constitute a significant portion of its income flows,” she said.

Ms Gwatipedza said the financial position of the fund has also stopped it from reviewing pension payouts despite the continued economic challenges pensioners are facing.

“It should be noted that in an effort to cushion pensioners from inflationary effects, the fund’s recent attempts to review pensions have been temporarily shelved, following the regulator’s advice.

“The fund should settle the benefit creditors first before reviewing the pension amounts.

“The rationale being that increasing pension levels would increase what the fund owes to pensioners thereby worsening the fund’s financial position. The high contribution debtors’ position is mainly attributable to the low remittance of monthly pension contributions by member local authorities,” Ms Gwatipedza said.

She said the fund was waiting for the issuance of the relevant Statutory Instrument covering the matter and will appraise its contributors, pensioners and beneficiaries on developments.

Ms Gwatipedza said the fund will, however, employ aggressive strategies in order to increase fund collections.