LAPF owed over $100m

Published: 14 June 2014

The Local Authorities Pension Fund is owed in excess of $100 million by local authorities across the country, which has seen it failing to make pension payments during the past 10 months.

LAPF chief executive Mr Charles Mandizvidza said the fund relies heavily on contributions from 46 local authorities which constitute 80 percent of their income.

"The fund presently has an almost 10-month backlog in the payment of monthly pensions as a result of a haemorrhaging liquidity crunch in the fund emanating principally from the non-remittance of monthly pension contributions by member local authorities," he said.

The fund has approximately 30 000 pensioners. There has been concern by some pensioners over delays in the payment of their pensions by the fund with some claiming that they had not been paid for the past two years, which Mr Mandizvidza denies.

"We have been reduced to paupers yet we were making contribution when we were still working where did that money go?" asked one of the pensioners who preferred to remain anonymous.

"The fund has invested in a lot of properties where is the money being generated going?"

The pensioners claimed that they were being made to pay for the sins of others as their former employees were up to date with their contributions. Why should we be made to suffer when we are paid up? The fund should come up with a strategy that distinguishes those that are paid up from those that are not," said the pensioner.

Mr Mandizvidza, however, denied that there are local authorities that are paid up.

"All our 46 subscribing members are in arrears to varying degrees," he said.

He said the fund's trustees empathised with the plight of pensioners emanating from the delays being encountered in remitting their monthly pensions and concerted efforts were being made to redress and normalise the situation.

"The fund has on board a number of strategies revolving around the engagement of the errant subscribing member local authorities persuading them to comply with pensions legislation which requires employers to remit pension contributions by the 14th day of the month following that in which the deductions were made," he said.

He, however, conceded that their efforts had achieved limited success because of the financial challenges being encountered by local authorities, some of whom are failing to pay salaries. Turning to the fund's investments, Mr Mandizvidza said cash generated by their investments (mainly rentals from real estate) was not sufficient to cover all their obligations to scheme beneficiaries.

"As things stand contribution income accounts for 80 percent of Fund revenues hence its criticality in oiling the operations of the Fund," he said.

The chairperson of the Urban Councils Association of Zimbabwe Directors of Finance Forum Mr Saratiere Chitemhe confirmed that local authorities owed LAPF more than $100 million.

"It's true that we owe more than $100 million. Local authorities are facing difficulties due to the liquidity challenges in the economy," he said.

LAPF has about 40 properties in the light and heavy industry, commercial and retail sectors across the country.
- The Herald