Zimbabwe’s National Social Security Authority (NSSA) political handlers are swindling pensioners of their life savings, arguing all none US dollar contributions were lost in an economic crunch that followed the country’s infamous chaotic land grab as they compete for capital to bailout allies. The country is now officially using a multi-currency system the local currency imploded. Its annual inflation had climbed to over 230 million percent before everyone stopped counting. Senior employees who are unauthorised to speak to the press claim political handlers are tying their hands as they shoot down proposals that would do justice to pensioned employees’ contributions as they have other use for the money. A year ago, leaving NSSA’s offices to collect a US$25 cheque from Zimbabwe Revenue Authority after it had been cleared it of any owing taxes James Gora (not real name), 66, knew he had been mugged. He felt violated. His simplicity had been prayed on. He felt angry but powerless against government bureaucratic might. Its political handlers always have their way. Lacking in ‘good sense and humanity’ the employee who served him, he says, as ‘if for good effect’ told him he was done with and ‘not to forget’ to tell his wife to come for funeral assistance in the event of his death.
Enquiring on how the figure came about, he was told ‘it was what his worthless Zimbabwean dollars were worth.’ The insult made him mad. “If l had known I wouldn’t have given them a cent. I would rather have been fired than agree to have my money deducted,” the emotional 66 year-old said. “What are they going to possibly give my wife if they couldn’t give anything to me the employee?” he queried. He knew he had been lied to. NSSA did not lose everything. In fact he remembers feeling proud when his now scorned Zimbabwean dollar contributions were being invested into real estate and other secure portfolios which company insiders say even helped the institution survive the period well. Chiketo had been making the maximum monthly permissible for an employee for 89 months between October 1994 and February 2002 when he took a retrenchment package. In 1994 alone he contributed ZWD$2 880, an equivalence of over US$330 using the exchange rate of the period. Recently, he ran into his former Human Resources manager who took a long hearty laugh at the ‘unbelievable insult.’ He now feels he needs to recover his stolen savings. In trying to find allies to bring the statutory body to account as to what became of his savings he contacted his colleagues on the same date he started making his contributions and took their recruitment package which whom they had been paying the exact same contributions he saw one crying foul over a ‘paltry US$1 000 lump sum.’ The deep-pocketed and unaccountable statutory body being accused of splurging cash into deals with a blind eye while starving beneficiaries it is obligated to assist was constituted by parliament in 1989 to provide social security to workers so that they have an income to look forward to upon retirement has been processing pensions not when due but upon follow-up by the concerned pensioner.
Following up it turns out was his biggest undoing he did so during a period when they were paying a standard US$25 cheque to every ‘worthless ZWD’ contributor who had not contributed for a period exceeding 120 months. They were however to realise the problems with it as it was primarily based on their current bank statements not the cumulative value of contributions made. A review was effected which now used a computing formula which pegged everyone who had contributed ZWD as having been earning an equivalent of US$150 per month and would then calculate their contributions against that but those pensions had been determined in the old system were not to have any reviews. They were to be the ‘tough-luck pensioners of the system,’ an insider said noting that there are documents that even suggested the lack of fairness of the criterion. Contacted for a comment the NSSA Public Relations officer, Philemon Chereni expressed shock at the possibility of that happening before requesting for written questions as he wanted to put his response in black and white. He was never to respond to the submitted questions in over a week and would not respond to further inquiries. A banker for over 20 years, Steven Chidza, however contends that it was not all investments that were lost and it cannot be reasonably be used as justification as a lot of infrastructural investments were made with the Zimbabwean dollar.
He notes that no proper evaluation of the true worth of people’s investments using companies and institutions’ balance sheets was done in the transition to the use of a multi-currency system that saw the local currency being dropped. In a 07th of March Chronicle installation of its Talking Social Security column in response to a National Economic Conduct Inspectorate (NECI) report that was reported on by the Zimbabwe Independent which accused the body of gross mismanagement of funds while bragging of publishing its audit certified unqualified accounts as a mark of ultimate transparency declared, “contributors should take comfort in the knowledge that their funds are in good hands and should be available for them when they eventually reach pensionable age.” NECI is a department in the Ministry of Finance and probes white-collar crimes. The report noted shady deals in flouting of tender processes, real estate projects, structures finance, investing in shares, banking including money market among others. A Comptroller and Auditor-General Mildred Chiri report also noted some gross irregularities in its operations as reported by the Zimbabwe Independent. It noted incomprehensive risk management, unapproved organisational structures, unsanctioned board fees, unauthorized rollover of investment deals and failure to adhere to good cooperate governance.
In particular, it warned of related-party dealings especially with Africom, FBC Bank and stockbroking firm MMC in the absence of any policy documents. “There is also a risk that a significant volume of finance may be channelled towards entities that are only related to the authority even if the transaction is not profitable,” the report was quoted as saying. NSSA has 20 % shares in Africom and FBC with Africom providing it with telecommunications services and FBC being its banker. Its management had access to 50 % of approved loans and made some unauthorised transactions in disposing vehicles to themselves without board approval the report observed. Although the statutory body’s primary function should be to preserve, invest and grow contributions, a source said, its senior management and ‘political handlers’ have other plans for the funds. It has virtually been “turned into a lender of the last resort by some businessmen and political handlers and an easy take-away place for cheap funds,” the Financial Gazette has also recently reported. The NECI report states that up to US$200 million NSSA funds are at the exposure of banks through a combination of direct equity investments, loans and money market investments in various mostly indigenous banks many reeling from the current liquidity crisis gripping the market. Funds being invested, the report notes are mostly from Workers’ Compensation Insurance Scheme (WCIF), National Pension Scheme (NPS), Occupational Safety and Health (OSH), Employees Funeral Fund and rentals from NSSA’s tenants. “In general,” the Labour and Social Welfare Minister Paurina Mpariwa commissioned NECI report noted, “It can be observed that NSSA placed its funds with nearly all the indigenous-owned banks, though at varying intervals and levels of funding.
Rates were also noted to be fairly uniform across the banks, with variances obtaining for varied instruments and tenors.” Some of the funds secured bailouts thus being exposed to institutions battling liquidity as is the case when government asked it to rescue a non-performing entity in ReNaissance Merchant Bank (RMB) – a US$35 million exposure. It faced closure before it was placed under curatorship before it resuscitated after NSSA opted to convert a US$8.5 million debt into equity and assumed a US$5.7 million debt owed to Econet Wireless by RMB and its parent company ReNaissance Financial Holdings Limited (RFHL). Further on, since RFHL owed RMB US$13 million and RMB wanted assets equivalent to offset the debt RFHL pledged Afre shares and the bank. The debt-to-equity swap was then followed by NSSA also buying Econet Wireless’s 19 % stock in Afre Corporation bringing its shares to 52 %. Currently there is a row over US$14 million net loss due to its share stake in Zimbabwe Stock Exchange listed company Star Africa Limited after ABC holdings executives persuaded NSSA management to meet the company’s highest bid of US$12.5 million in 2009 losing US$2.5 million on the onset. Allegations are that while they bought the shares at 12.5 cents they could have been bought for 10 cents per share at the ZSE. NSSA directors and managers are, regardless of the plight of pensioners, buying mansions and luxury cars according to recent press reports. Some of the NSSA funds that are being availed to the nation through banks loans albeit with a stipulated interest rates of below 11 % are being denied pensioners Chiketo also experienced when he was ironically told by FBC Bank that he was too old to access the funds which were not meant for persons above age 55 late last year.
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