Ecocash holding, through wholly owned insurer Econet Life has launched a pension fund that they believe will revolutionise the pensions industry. The micro pension scheme called Dura/Isiphala will be available to all public members though the company has clearly set its sights on the informally employed and the informal sector. The product was launched over the weekend in Kariba with many guests, including Deputy Minister for Women’s Affairs, Community, Small and Medium Enterprises Development, Jennifer Mhlanga.
Pension funds and Zimbabwe
The concept of pension or retirement funds is a simple one. People pay contributions on a regular basis to the insurer who invests the money into their own projects. Upon retirement, there is some divergence as some pension funds will pay out lump sums, some will make ongoing payments (annuities) and some will mix the two. However, Zimbabwe’s checkered history with savings and investment has muddied the waters. Many pensions and life savings had their values wiped out due to the erosion of the value of money in Zimbabwe at least twice in our history. The problem for individuals here is that pension companies received valuable money and presumably invested in valuable projects. While the economy suffered and the defined benefits of these pensions amounted to little, pension funds made obscene profits.
The Ecocash pension fund has some interesting highlights to it. Firstly and perhaps most importantly, the fund is US dollar-denominated. Secondly, the fund looks like a hybrid fund, given that there was mention at the launch of members being able to access some of their provident funds after a few years. The third thing to note is the focus on the informal sector which should allow flexibility when it comes to contributions. Currently, payments into the pension fund can be made at Econet Shops, AFC Bank, Steward Bank or at any EcoSure touch points.
Another sloppy launch
The idea behind the provident fund is brilliant. However, Econet and Ecocash’s launching of things without taking them seriously has been criticised. The Dura/Isiphala is another example of this practice. Making grand announcements and hosting parties is great but where is the information on the product? No online brochures, no mention on the EcoLife website and not even a WhatsApp number to enquire about the product. In 2022? While I usually lean on the side of understanding the challenges that businesses deal with this time, I must say this is absolutely sloppy.
We will eventually get our hands on information about the provident fund, and we will take an in-depth look when we do. Until then, we will celebrate the fact that somebody is trying to innovate in our insurance industry.