- November 13, 2017
- Posted by: Cyberplex
- Category: Local News
Livingstone Marufu Business Reporter
The Insurance and Pensions Commission (Ipec), has ordered its members to dismiss all trustees who fail to get a Certificate of Proficiency (COP) in trusteeship. This comes as the Commission moves to ensure that the interests of fund members are protected and that pension funds are run in an accountable, transparent and efficient manner.
Earlier this year the commission made it mandatory for Pension Fund Trustees to have a COP in trusteeship, as part of measures to improve the governance of pension and provident funds in the country’s insurance sector. Section 6B of Pension and Provident Funds Regulations (Amendment) Regulations SI 80 /2017 states that, “No person shall be appointed, elected or continue to act as a trustee unless he or she possesses such qualifications and additionally, or alternatively such experience or expertise as may be required for the proper administration of the fund . . . ”
SI 80 /2017 was gazetted after the Commission had noted with great concern the widespread poor record-keeping and general weak management of the pension funds in the country, which threatened the viability of pension funds. In a Circular to Zimbabwe Association of Pensions Funds, Ipec Commissioner, Mr Tendai Karonga said : “All Pension Funds are required to submit Ipec copies of COPs for all their trustees within 14 days from the date of acquiring such a qualification.
“Any trustee who does not acquire the COP qualification within the period stipulated in Statutory Instrument 80 of 2017 must leave office as such be guided accordingly.” This circular has been issued in terms of Section 6D of the Pensions and Provident Funds (Amendment) Regulations 80 0f 2017, which empowers the Commissioner to determine the core skills a trustee must undergo. Mr Karonga said if there are rampant cases in the industry where decisions were and are being made in the interests of sponsoring employers at the expense of the pension fund and its members, this will be an indication of poor corporate governance practices.
The Commissioner said that the regulator would not tolerate trustees who are not fit and proper to hold the position of trusteeship and who are trustees by virtue of being vocal or loyal to run pensions funds as they lacked, the “expected expertise and independence commensurate with their office. The board of trustees has a fiduciary role of managing the assets of the fund for the benefit of its members and beneficiaries. It is therefore essential that the board of trustees be adequately capacitated to fulfil this vital role efficiently and effectively.
In order to achieve this goal, the trustees should possess expertise, which equips them with the capacity to provide qualitative and not just quantitative decisions. Commissioner Karonga said that the qualification should be understood not just for its benefits to the individual but to the industry as a whole. He also highlighted that the directive to have the COP in trusteeship mandatory, “should not be viewed as a show of lack of confidence in the ability of trustees but as a value addition to the ability of trustees”.