Govt gazettes legislation on pension fund trustees
GOVERNMENT has gazetted legislation, which establishes the framework governing the operation of trustees of local pension funds, among them conduct, qualifications, term of office and appointment.
According to Statutory Instrument 80 of 2017, the trustees of every registered fund shall be responsible for directing, controlling and supervising the operations of the fund in accordance with the Act and rules of the fund.
Zimbabwe is sitting on pension assets worth close to $10 billion, which Government contends is a strategic source of funding that can be unlocked to finance various economic development projects
According to latest official figures, the regulator, assets under National Social Security Authority are worth $800 million, $6 billion is under public sector schemes, $2,9 billion under private occupational schemes and $100 million is with private individual policies funds.
A high level industry investigation reportedly established that pension funds boards of trustees have hitherto engaged in dereliction of duty, as they are patronised, manipulated and controlled by employers, due to influence from insurance companies.
The absence of proper technical skills among trustees in various pension funds has affected the growth of funds in Zimbabwe, said the Institute of Directors of Zimbabwe chairperson Ms Susan Mutangadura.
She said last year that these technical skills should be combined with high levels of corporate governance practices to build a solid pension fund system that is capable of working with experts.
Unless exempted by IPEC, every trustee shall undergo training on core skills within six months of appointment or election as a trustee. Any person who, before the corning into effect of these regulations, was a trustee shall unless exempted by the IPEC, undergo training on core skills within one year from the date of publication of these regulations.
Further, the regulations say, any trustee who without good cause shown fails to comply with the regulations shall be disqualified to act as such until he or she acquires the training on core skills.
In terms of the Pensions and Provident Funds Amendment Act, administered by the Insurance and Pension Funds Commission, registered funds shall have at least three and not more than nine trustees, of which half shall be elected by the members of the fund.
The commission, on application by a fund and satisfied that three trustees would be impracticable, unduly expensive or not in the interest of the fund, authorise the fund to have trustees fewer than the three and may, for good cause shown and on due notice to the fund, withdraw such authorisation or exemption.
A trustee shall hold office for such period not exceeding five years and upon the expiry of their term of office are eligible for re-appointment or re-election for another period not exceeding five years.
On the expiry of the period for which a member has been appointed or elected, trustee shall continue to hold office until they have been re-appointed or his or her successor has been appointed.
However, this will be the case provided that a trustee shall not continue to hold office under this provision for more than three months. Apart from passing the probity test for fit and proper persons, no person shall be appointed to be a trustee if they have been adjudged or otherwise declared insolvent or bankrupt in terms of a law in force in any country, and has not been rehabilitated or discharged.
One will also not qualify to be a fund trustee if they have made an assignment to or arrangement or composition with their creditors in terms of a law in force in any country, and the assignment, arrangement or composition has not been rescinded or set aside.
The legislation also said, if within a period of five years preceding application for appointment or election, one has been convicted inside or outside Zimbabwe of an offence involving dishonesty, may not be eligible to become a fund trustee.–herald