Govt pays pensioners US$ compensation

THE government has, through its US$75 million worth Kuvimba Mining House investment, started disbursing dividends to pensioners as compensation for the loss they incurred following the country’s 2019 monetary reforms.

The reforms discarded the fixed 1:1 exchange rate peg between the US$ and the local currency and liberalised the market — a move which affected pensioners’ savings.  

This comes as in June last year Kuvimba Mining House declared a dividend towards the compensation of pensioners and the ministry of Finance had tasked the Insurance and Pensions Commission to come up with the implementation modalities which saw the most vulnerable pensioners benefitting first.

Kuvimba Mining House investment is a joint venture between the government which owns 65 percent and an international consortium which owns 35 percent, with the mining group’s portfolio spanning across Freda Rebecca Gold Mine, Shamva Gold Mine and Jena Mine.

In a statement last Friday, Finance minister Mthuli Ncube announced the payment of US$100 to each pensioner. He said payment commenced on January 10.

“Pursuant to the 2019 monetary reforms, the conversion of pension assets and liabilities on a parity exchange rate of US$1:$1 and the subsequent adoption of a market-determined exchange rate, resulted in the loss of value for pensioners, particularly in relation to monetary assets. To cushion          pensioners, the Treasury, through the 2021  National Budget, allocated an investment worth US$75 million in Kuvimba Mining House for the purpose of compensation of pensioners.

“It is the investment return that is earmarked for compensation to private occupational pensioners so that pensioners benefit on a sustained basis. 

“The investment is being co-administered by the government and the Insurance and Pensions Commission (Ipec), and compensation to pensioners is being done through dividend declarations,” Ncube said.

 The minister said the  modalities were concluded in December last year and that  disbursements to almost 4 000 eligible pensioners had commenced with each pensioner receiving US$100 cash, through BancABC bank and its kiosks in Pick’n’Pay outlets across the country.

“Payment to pensioners began 10 January 2022. As a government, we are aware that not all pensioners will benefit from this first tranche dividend distribution.

“However, rest assured that future dividend disbursements will target other cohorts of pensioners, as and when the dividend is declared. Such developments will be communicated in due course.

“With respect to compensation for 2009 loss of value, the government is working together with Ipec and the insurance and pensions industry to bring closure to the pre-2009 compensation. 

“Parties are finalising the 2009 compensation framework that will provide guiding principles on the criteria for assessing and quantifying prejudice as per the findings of the Justice (George) Smith Commission of Inquiry,” Ncube said.