An Analysis of the Effects of Currency Reforms on Pensioners’ Benefits Payout: A Case Study of the Mining Industry Pension Fund

Abstract

The focus of the study was to analyses the effects of the currency reforms on pension benefits payout at the Mining Industry Pension Fund (MIPF). The problem was that purchasing value or power of pension benefits payout was less than what the pensioner had contributed. This study was necessary to discover the real effects of the mismatch between the value of pension contributions and benefits payout in order to sustain the value. This would then uplift the livelihood of pensioners. The problem is premised on the conversion of USD contributions to RTGs pension benefits payout. The researcher reviewed related literature to open up the research gap and learn from the existing body of knowledge from previous studies. Appropriate methodologies were used to gather data from the field. In this COVID19 era, there were challenges in gathering data from the field but the researcher used electronic means to administer the instruments to complete the study. The researcher used a questionnaire and interview to collect data from MIPF pensioners, MIPF staff, mine administration and IPEC managers. The findings of the study indicated that currency reforms were adversely affecting pension benefits payout. The low pension benefits payout impacted the standard of living of pensioners to improvise. The study concluded that inflation, conversion and other economic conditions were devaluing the earnings of pensioners. The study recommends the Government device policies that protect the value of pension benefits payout from falling. Again the Government must allow the contributions made by pensioners to be invested in the foreign markets so that MIPF can also invest in offshore accounts. The pension benefits payout must be paid at the prevailing interbank rate and be inflation-indexed as this will ensure there is value preservation of pension benefits. Finally, the study suggested future research area to focus on assessing a comparative study on the impact of currency reforms on Pension Fund versus insurance products in Zimbabwe.