eBusiness Weekly
Tawanda Musarurwa
A 2019 study by the UK’s Open University found more than a third of jobs (approximately 12 million jobs) could cease to exist altogether by 2024 as a result of digital technology and automation in that country.
That was before the onset of the Covid-19 pandemic. Those numbers estimates should be higher now, and more applicable to countries across the globe as a result of the necessitated accelerated digitalisation.
Zimbabwe’s pensions industry is one of those sectors that accelerated digitalisation, especially over the course of last year, but this has had some unintended (or perhaps intended) consequences.
“The pandemic accelerated the digitalisation of both supervisory processes and the insurance business value chain… For the industry, Covid-19 presented an opportunity to leapfrog digitalisation.
“However, as with the law of unintended consequences, the automation process resulted in increased operational efficiency and excess staff,” said sector regulator, the Insurance and Pensions Commission (IPEC) in the Q1, 2021 Pensions Report.
“Redundancy risk leading to calls for voluntary retrenchments in the industry have heightened with corporate restructuring and streamlining of operations.”
Observers says constant digital skills learning for employees has become vital to ensure that their skills keep pace with the continued advancement in technologies.
Meanwhile, the local pensions sector’s total income for the quarter to March 31, 2021 rose to $34,20 billion compared to $5,79 billion in the prior comparable period.
“The income was mainly driven by fair value gains, profit on disposal of investments and contributions, which accounted for 95,25 percent of the total income,” explained IPEC.
“The remaining 4,75 percent is accounted for by transfer from other funds and rental income.”
Total industry expenditures for the period under review amounted to $2,28 billion, of which 61,55 percent went towards benefit payments.
Average expenses to total income ratio remained unchanged at 2,02 percent.
Over the period under review, the pensions industry’s total asset base increased by 494,16 percent from $29,81 billion as at March 31, 2020 to $177,12 billion as at March 31, 2021.
The performance of the asset base was above annual inflation, which averaged 240,55 percent during the quarter.
“The increase in the asset base was mainly due to revaluation of investment property and quoted equities, which increased by 413,45 percent and 459,03 percent, respectively,” said the regulator.
“These two major asset classes constituted 71,84 percent of total industry assets.”
The sector’s compliance levels to prescribed assets (PAs) remains very low despite an increase in PA holdings over the period.
The latest numbers show that the value of prescribed assets increased in nominal terms by 135,81 percent to $5,40 billion from $2,29 billion reported as at March 31, 2020.
Said IPEC: “While there was an increase in the nominal value of prescribed assets investments, compliance was still low at 3,05 percent against the regulatory minimum of 20 percent.”
