The following article is the first of a series of articles aimed at highlighting the changes brought about by the new pensions law in Zimbabwe. The Act seeks to modernise the regulation and supervision of the pensions industry. An improved legal and regulatory framework can also support broader objectives in the financial sector, including ensuring that the sector grows in a more transformed and inclusive manner.


On the 2^nd of September 2022 the President of Zimbabwe passed into law a new pensions law, the Pensions and Provident Funds Act (Chapter 24:32). This new law came into operation on the same date and repealed the existing Pensions and Provident Funds Act (Chapter 24:09).


The new Act is designed at aligning our legislative and regulatory framework in line with global regulatory standards. However, while the new Act is welcome its drafting style negates the fulfillment of its objectives.


The new law ushers in fundamental provisions, which if properly implemented will bring a paradigm shift to the pensions industry. Some of the major provisions are discussed below;

Aligning with the Constitution of Zimbabwe

• The adoption of The Constitution of Zimbabwe Amendment (No.20) Act 2013 has brought with it great optimism and will have an enormous impact on the Insurance and pensions industry. The Act carries with it the principles as enshrined in the Constitution particularly the right to administrative justice (section 68) and basic values and principles governing public administration (section 194). IPEC being the pensions industry regulator has been given a more robust role in line with the above constitutional provisions, giving clarity to its mandate which will improve the regulation and supervision of the industry.

Consumer Protection

• The Justice Smith Commission of inquiry identified the principle of treating customers fairly as an important pillar of financial soundness. The report advocates for the protection of rights of policyholders and pensioners. The Act carries through provisions enhancing consumer rights. It incorporates universally accepted principles for adequate financial consumer protection to ensure protection of the rights and benefits of fund members and their beneficiaries. The Act also introduces a Pension Protection fund administered by IPEC.

Fund Governance

• The daily operations of a fund are directed, controlled and overseen by a Board of Trustees. The new law entrenches best practice principles relating to corporate governance and risk management to ensure sound corporate governance and risk management practices. The duties, responsibilities, fit and proper requirements of Trustees are a welcome change towards enhancing governance. These enhancements are also coupled with the fit and proper requirements of the principal officer which brings Zimbabwe in line with other jurisdictions regarding governance of pension and provident funds.

Climate Change

• Climate change is a reality we are currently facing, and the study of the impact of climate change on the pensions industry is important and has far-reaching consequences. Pension funds are major investors in government bonds, stocks and real estate. This makes the pensions industry a valuable ally in adapting to climate change. They have considerable capacity to make long-term investments in infrastructure to support climate change adaptation and investments. While Section 34 of the Act allows for other investments approved by the Commission, there are no provisions dealing with climate-related risks or at the least, regulatory objectives on climate change. The Act should at least have had provisions giving IPEC a mandate to come up with a framework on climate change related risks that has a bearing on a funds’ own risk and solvency assessments, prescribed status assets and offshore investments.

In conclusion, the intention of the new pensions law is welcome in as far as it is designed at aligning our legislative and regulatory framework in line with global regulatory standards. However, the intention of the Legislature is compromised by the drafting style, lack of definitions, errors in referencing, general editing errors which affect the substance of the new law. Errors in referencing are apparent in section 11 which deals with dissolution of funds (referencing to Section 13 and Section 36 are misplaced as they are not related to dissolution of funds). The most glaring error with drastic effect is to be found in section 25. The Act generously carries with it two section 25s (qualifications and disqualifications for appointment of board member: Terms of office of board members respectively) and the adverse effect is in the referencing of section 25 in section 27. Section 27 is a new section which deals with the principal officers. It relates to qualifications, appointments and responsibilities of principal officers. Depending on which section 25 one decides to adopt as being referenced, a principal officer can only hold office for a period which shall not exceed ten years. Section 16 (8) which carries the new provisions empowering the Commissioner to garnishee employers for outstanding pension contributions requires deletion as the last line is misplaced. Terms or phrases are defined to provide a meaning of the term or phrase in an Act and the failure to define a liquidator who plays a crucial role in governance issues is worrying.


The drafting style, general editing errors, referencing errors affect the substance of the Act and makes it harder to understand the law. The manner in which new legislation is written and enforced should minimise disruption and promote certainty, rather than introduce confusion. The new pensions law is thus in need of urgent revision and amendments to ensure that the law is understood and to ensure that the objectives of the Act are fulfilled.