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Harare - Zimbabwean President Robert Mugabe on Thursday swore in an eight-member commission to probe the conversion process for insurance contributions and pension benefits when the country dollarised in 2009.
This follows concerns raised by policyholders and pensioners that they had been short-changed on their investments in the changeover period on the pretext that their contributions had been eroded by inflation.
Under its terms of reference, the commission will establish a compensation mechanism if it is found that pension fund members or insurance policyholders were materially prejudiced.
Analysts however said the move would put the blame on Mugabe’s administration.
They argued that Mugabe, through the former Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono, presided over a “money-printing policy” that saw inflation reach 231 million percent in 2008.
By January 2009 the inflation was high as 6.5 quindecillions, rendering the Zimbabwean dollar useless.
This, they argue, would have affected pension funds which are now struggling to pay pensioners.
“In any case, the RBZ has only budgeted US$20m to pay off all the Zimbabwe dollar balances that were in the banking sector before dollarisation.
“This obviously gives an indication of how pension funds lost value during the hyperinflation period,” said an analyst.
Pension funds also had investments in the property and stock markets. However, these investment vehicles have been on a downward spiral since dollarisation and pension funds will not realise much value if they are to liquidate their positions.
The commission is chaired by retired judge George Smith and members took their oaths of office at a ceremony held at Zimbabwe State House on Thursday.
This follows concerns raised by policyholders and pensioners that they had been short-changed on their investments in the changeover period on the pretext that their contributions had been eroded by inflation.
Under its terms of reference, the commission will establish a compensation mechanism if it is found that pension fund members or insurance policyholders were materially prejudiced.
Analysts however said the move would put the blame on Mugabe’s administration.
They argued that Mugabe, through the former Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono, presided over a “money-printing policy” that saw inflation reach 231 million percent in 2008.
By January 2009 the inflation was high as 6.5 quindecillions, rendering the Zimbabwean dollar useless.
This, they argue, would have affected pension funds which are now struggling to pay pensioners.
“In any case, the RBZ has only budgeted US$20m to pay off all the Zimbabwe dollar balances that were in the banking sector before dollarisation.
“This obviously gives an indication of how pension funds lost value during the hyperinflation period,” said an analyst.
Pension funds also had investments in the property and stock markets. However, these investment vehicles have been on a downward spiral since dollarisation and pension funds will not realise much value if they are to liquidate their positions.
The commission is chaired by retired judge George Smith and members took their oaths of office at a ceremony held at Zimbabwe State House on Thursday.
