Zimbabwe. Zimdollar return hits pensions
Zimbabwe Association of Pension Funds (ZAPF) is saying the introduction of Statutory Instrument (SI) 142 has reduced confidence in policyholders and shareholders in the pensions industry that has been on recovery path during the multi-currency regime.
The multi-currency regime was introduced in 2009 after a decade-long hyperinflation which eroded prescribed assets and cash at banks for pension fund members.
However, it was scrapped last month by authorities.
In an e-mailed response by ZAPF director-general Sandra Musevenzo, policyholders and shareholders were starting to have faith in the industry, thanks to the multi-currency regime before it was scrapped.
“The industry had hoped to recover during the multi-currency regime, but the sudden introduction of SI 142 in the economy has dampened the already low confidence levels of policyholders and shareholders in the industry. Introducing the Zimdollar has suddenly refreshed the memories of the hyperinflationary period before 2009, leaving a big dent on the little confidence that members had in the industry,” Musevenzo said.
During the hyperinflation period, the pension industry saw assets which were denominated in Zimdollar lose value.
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