Where did Our Money Go? Answering the Questions behind Loss of Value to Pensioners in Zimbabwe after Multi-Currency Adoption

Taonaziso Chowaa, Richard Mhlanga, Macdonald A. P Munakamwe


The turn into the year 2009 brought dollarisation of the Zimbabwean economy which saw pension funds assets and
liabilities being converted into the United States dollar (USD). The derived pension values fall short of ‘pensioner/
policyholder reasonable expectations’ (PRE). This research defines PRE and explores the specific factors that led to
the demise of pension values over the years 1997- 2008. SPSS analysis of questionnaire responses and Microsoft
Excel analysis of annual asset returns and exchange rates reveal; the hyperinflationary economy, prescribed asset
regulations, use of the Old Mutual Implied Rate (OMIR), pension products design and the contagion effects of the
2003/04 banking crisis as the lead factors against pension build up. The researchers recommend some regulatory
amendments, improved client communication and advertisement, PRE guidelines, pensioner compensation,
accurate benefit projections and voluntary contributions by pensioners to regulators and pension funds.

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