Zimbabwe’s pensions regulator has threatened to crack down on major State-owned enterprises and other employers that have failed to remit millions of United States dollars in pension contributions deducted from employees, warning that persistent defaulters face garnishee orders.
In its first-quarter report, the Insurance and Pensions Commission (Ipec) said total outstanding pension contribution arrears rose 18 percent to US$148,96 million from US$126,26 million recorded in December 2025.
The regulator said a significant share of the arrears is owed by State-owned enterprises, including subsidiaries of Zesa Holdings, as well as several local authorities and commercial entities.
According to Ipec, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) was the largest defaulter, owing ZiG733,08 million, equivalent to about US$28,95 million.
The Zimbabwe Power Company, another Zesa Holdings subsidiary, owed ZiG369,05 million (approximately US$14,58 million), while parent company Zesa Holdings had outstanding pension contributions amounting to ZiG179,50 million (about US$7,09 million).
Other major debtors include Harare City Council, which owes ZiG138,76 million (around US$5,48 million), the Civil Aviation Authority of Zimbabwe with ZiG130,73 million (about US$5,16 million), the Zimbabwe National Water Authority with ZiG114,75 million (approximately US$4,53 million), and the National Railways of Zimbabwe, which has arrears of ZiG76,72 million (about US$3,03 million).
Management of several companies named in the report declined to comment, but Ipec said it continued engaging sponsoring employers to recover the outstanding funds.
“The commission continues to engage sponsoring employers to ensure timely remittance of contributions and, in line with the Pensions and Provident Funds Act, will garnish those with long-outstanding balances,” Ipec said.
The regulator noted that pension contributions received during the first quarter totalled US$86,01 million, representing a 13 percent increase from the US$76,26 million collected during the corresponding period last year.
Despite the growth in contributions, arrears continued to rise, reflecting mounting financial pressures across the economy.
Ipec said the 10 biggest defaulters account for about 61,6 percent of the industry’s total pension contribution arrears, highlighting the heavy concentration of debt among a relatively small number of employers, most of them public sector institutions.
The regulator said it was prepared to invoke garnishee orders against employers that continue to ignore regulatory directives, signalling one of its strongest enforcement drives to date.
The increasing arrears come as many sectors of the economy continue to grapple with liquidity constraints under Zimbabwe’s tight monetary policy environment, with several industries experiencing operational challenges and job losses.
Ipec also reported that foreign currency-denominated pension arrears had risen by 15 percent to US$60,52 million by March 31, 2026, compared with US$52,6 million at the end of December 2025.
“By March 31, 2026, foreign currency-denominated contribution arrears had reached US$60,52 million, equivalent to 5% of the sector’s foreign currency-denominated assets,” the commission said.
“To mitigate further accumulation, boards of funds are encouraged to actively engage and work closely with sponsoring employers to address outstanding arrears.”
Despite the growing debt, Zimbabwe’s pensions industry recorded a strong first quarter, with total assets increasing by 10 percent to US$3,41 billion, driven by new investments and gains in property and listed equities.
Ipec said contributions remained the dominant source of pension fund income, accounting for 90 percent of the sector’s US$95,75 million membership-related revenue during the quarter.
Member contributions totalled US$31,37 million, while employers contributed US$46,57 million, resulting in an employer-to-member contribution ratio of 1,49:1.
The regulator also reported a significant improvement in pension records management, with nearly 147 000 Zimbabweans being reunited with their pension records following a major data clean-up undertaken in partnership with the Construction Industries Pension Fund.
The exercise contributed to a 14 percent increase in total pension fund membership, which now exceeds 1,14 million members.
Looking ahead, Ipec said its supervisory efforts would increasingly focus on strengthening compliance, operational discipline and fiduciary accountability across the pensions sector while taking tougher action against employers that fail to safeguard workers’ retirement savings.
Source – The Independent
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