Zim retiree sues Old Mutual to recover pension

File picture: Mike Hutchings/Reuters

File picture: Mike Hutchings/Reuters

Published Mar 28, 2017

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Harare – For the first time since Zimbabwe’s 2008 financial crash, a policy holder of South Africa’s Old Mutual has taken the company to the Harare High Court claiming he was cheated of his pension.

A veterinary surgeon, Alan Park, is seeking to recover the amount he paid into Old Mutual over 42 years – the life of the policy in which he invested.

When Zimbabwe abandoned the Zimbabwe dollar in 2009 after years of hyper-inflation, many pensioners, not only from Old Mutual, were left penniless and were paid out small amounts after lifetimes of investment in those companies.

One pensioner recalled this week: “I was able to pay half my monthly water bill after more than 20 years’ paying into a pension fund.”

Old Mutual last week claimed it had increased its annual profits by more than 600% over the previous year. It remains one of Zimbabwe’s largest companies and dominates the financial sector.

But Park is seeking compensation for his lost pension, according to a report in the state’s Herald newspaper yesterday. He claims that when the policy matured in 2014, he should have received R163000 and then about R50000 a year. Old Mutual offered him about R6000, according to the company’s operations and services department in Harare.

Park, who never cashed in his policy, claims he contacted Old Mutual in Harare and even in London claiming he was owed significant sums of money from his years of investment. But he says his approach was “fobbed off” by all, including Old Mutual’s former chief executive, Julian Roberts.

Old Mutual and other pension companies’ “pitiful” payments to pensioners was widely criticised at the time of the Zimbabwe crash and in the following years.

Many pensioners who had contributed to the company all their working life were left penniless. Some who had access to British citizenship were sent to the UK, in a one-off rescue effort at the start of the four-year inclusive government that ended in 2013.

Old Mutual argued that it too, had been affected by the crash of the economy, but it had invested in many buildings and shares over the years which regained hard currency status when Zimbabwe officially entered the foreign currency era with the arrival of the inclusive government in 2009.

Zimbabwe’s economy and its currency crashed for many reasons over several years, but its sharp decline came after Zimbabwe lost nearly 40% of its foreign currency earnings from 2000 after land invasions paralysed most commercial farming.

Four months ago Zimbabwe introduced a new currency, known as Bond Notes, to help keep the economy in cash.

Even now, Bond Notes are not easily available from the banks. Many economists predict another crash.

US dollars are now only seen in about 20% of transactions in supermarkets, and in urban areas at least, Zimbabwe is mainly using plastic cash.

Many former Old Mutual policy holders were incensed at the pittance they received from the company after the 2008 crash. But some, encouraged by the arrival of an inclusive government the following year, began investing again.

“I wonder what will happen to the policies I took out for my two sons in 2011,” said a small Zimbabwe businessman who operates in Harare and asked not to be named. “I should have invested in policies outside Zimbabwe. I did it with Old Mutual in Zimbabwe,” he said.

Park’s claim comes after many pensioners considered taking action against Old Mutual in particular, but most of them said they didn’t have the funds to take on the giant company, which hired a top-class legal team to defend it.

Independent Foreign Service

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