Pressure mounts on Governments to provide sufficient social protection

BUSINESS REPORTER

 

Governments are under intense  pressure  to provide adequate social protection  as current workers are not saving  for life after retirement, which could make it difficult to generate  enough income to meet some of their obligations including basic requirements after retirement, Finance and Investment Promotion Minister, Mthuli Ncube has said.

Business Times can report that pensioners’ benefits are funded by contributions from current members, whose monthly contributions vary based on their income, and payments from employers.

Ncube made the comments yesterday in the resort town of Victoria Falls during a global forum organised  by the International Organisation of Pension Supervisors (IOPS) and the  Organization for Economic Co-operation and Development (IOPS-OECD).

This year’s forum’s host supervisor is the Insurance and Pensions Commission (IPEC).

“I am aware of a study carried out by the UN on “The domestic savings shortfall in developing countries, which revealed that 91% of Sub[1]Saharan African workers do not save for old age.

“This is a cause for concern, as it implies that current workers are not saving for life after retirement, hence may struggle to generate income to meet some of their obligations including basic requirements after retirement.

“Consequently, pressure will continue to mount on Governments to provide adequate social protection,” Ncube said.

He added: “Whilst pension schemes in sub-Saharan African countries are characterised by low contributions due to relatively low earnings, high informality as well as high financial illiteracy levels, I encourage this forum to contribute towards coming up with solutions, that will ensure attainment of Sustainable Development Goals.”

According to the OECD, Ncube said, world pension assets increased by almost 50% from about US$40 trillion in 2016 to US$61 trillion in 2021.

The growth is, however, expected to be weighed down by high inflation and interest rates experienced in 2022.

“With the afore-shared statistics, it is evident that more needs to be done from a policy and supervisory perspective to unleash the full potential of the pensions industry to achieve better outcomes for pension scheme members.

Speaking at the conference yesterday, IPEC Commissioner Grace Muradzikwa commended the government for supporting the insurance  and pensions sector regulator’s  bid to host this  international  conference.

“Honourable Minister, invited Guests, ladies and gentlemen, I wish to appreciate the opportunity given to us as a country to host such an esteemed global event, whose governance membership is composed of 81 countries and 8 Associate organisations, as well as two observers.

“We are indeed privileged to be your hosts. We appreciate the confidence bestowed on us to host this conference since the Insurance and Pensions Commission of Zimbabwe is a fairly new member of IOPS.

“….It would be amiss of me not to acknowledge the government’s support through our parent ministry, the Ministry of Finance, Economic Development and Investment Promotion for supporting our bid to host this esteemed conference.

“The fact that the Minister and the Deputy Minister have graced us with their presence at this Global Forum also speaks volumes about their commitment to seeing us succeed.”

 

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