The Zimbabwe Construction and Allied Trades Workers Union (ZCATWU) has expressed concern over the the proposed Fitness and Probity Standard for Trustees by the Insurance and Pensions Commission (IPEC), particularly section 4.2c which the union says seeks to eliminate trade union officials from the trusteeship of pension funds.
In a statement, ZCATWU General Secretary, Nicholas Mazarura , said the section classified trade union representatives as conflicted parties.
Section 4. 2 c states that a trade union representative cannot be a trustee as he represents members of the pension scheme who are only one class of beneficiary and that their bias towards members could result in conflicted decisions.
“ZCATWU believes that the proposed new measures lack depth on the structural functions and role of pension funds. IPEC has not consulted widely, its proposals are narrow and do not have direct benefits for beneficiaries,” said Mazarura.
He said section 4.2 c was discriminatory and ill-thought as it sought to elbow out workers’ representatives for selfish reasons.
“It must be noted that trade unions played a pivotal role in the formation of sectoral pensions’ funds and it is overzealous for IPEC to classify unionists as conflicted in running their own creations,” he said.
The ZCATWU General Secretary said Section 4.2c clearly contradicted with section 7.2, which stated; ‘to maintain the trust that members of the pension fund place in them, effective trustees deal with all fund members and beneficiaries in a fair and objective manner.’
Mazarura said effective trustees did not necessarily give preferential treatment to beneficiaries within a particular class of members or favour one class over the other.
“Many funds have different types of participants: active members who are making contributions and accruing benefits, deferred members who have left employment but have not transferred their assets and will draw future benefits when reaching retirement age, and retirees, including beneficiaries of deceased members, who are currently drawing retirement benefits.
“Effective trustees balance the interests of all types of members, treating each class of members fairly and ensuring that benefits and accumulation adjustments are done in a fair and transparent manner”.
He, however, pointed out that while section 7.2 recognised other classes of beneficiaries, it was silent on the trade union member, who was the major stakeholder and future beneficiary, particularly for compulsory Sectoral Pension Funds (SPF).
Mazarura noted that Sectoral Pension Funds were a creature of collective bargaining by employer and employee parties to advance their interests and welfare.
“For example, the Construction Industry Pension Fund was established following the promulgation of Statutory Instrument 239 of 1992, and registered in terms of section 79 of the Labour Relations Act (Chapter 28:01). SPF’s were created by workers to cater for their welfare upon retirement. They are different from voluntary Private Pension Funds,” he said.
It was a false impression, he said, for IPEC to believe that trade unions represented the interests of active members, noting that unions drew membership and represented a broad section of society from students to pensioners.
“Trade unionists have always agitated for the interest of workers but IPEC now seeks to reverse that. It is only the current active member who has the potential to make the best investment decisions as they stand to benefit from the same decisions. Our best interests are safeguarded by our own who are trade union representatives,” he said.
He said while ZCATWU was not opposed to the regulation of pension funds, it was against disruptive interference in the form of IPEC’s discriminatory prescriptions, adding that the absence of trade union representatives pension funds would be abused to the detriment of beneficiaries.
It was possible, he said for Pension funds to be forced to invest in non-performing prescribed assets which did not directly benefit beneficiaries.
Most pension funds, the General Secretary said, needed to improve on their benefits as they were not doing enough towards the welfare of beneficiaries, adding this was where the critical contribution of the trade union representative was required as he would have been mandated and deployed by the union membership for guardianship of their future.