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Implementation of Pension Funds Survival Strategies in a Hyperinflationary Economy. A Case of Pepukai Assurance Company

Author

Listed:
  • Munashe T. ZIYAMBI

    (Midlands State University, Zimbabwe)

  • Newman WADESANGO

    (University of Limpopo, Republic of South Africa)

Abstract

In hyperinflationary economies, pensioners often face severe economic hardships despite years of contributions to pension funds. This research investigates the survival strategies employed by Pepukai assurance company to protect pension funds under these challenging conditions. Using a quantitative approach, the study collected data through questionnaires, which were analyzed with the SPSS statistical tool and quantified using a Likert scale. A purposive sampling method was employed to ensure the relevance of surveyed participants. The analysis identifies several critical factors influencing the success of pension fund strategies, including decreased purchasing power, heightened market and investment risks, political instability, and challenges in asset allocation and liability management. Although the company’s strategies such as effective risk management, diversification, currency hedging, skilled management, and client education were implemented, their efficacy was undermined by current hyperinflation. This study contributes to existing literature by highlighting the complexities of managing pension funds in hyperinflationary environments and emphasizes the need for comprehensive investment policies, regular strategy reviews, alternative investment considerations, and the maintenance of sufficient liquidity. These insights are essential for pension fund managers and policymakers aiming to enhance the resilience of pension systems in volatile economic landscapes.

Suggested Citation

  • Munashe T. ZIYAMBI & Newman WADESANGO, 2024. "Implementation of Pension Funds Survival Strategies in a Hyperinflationary Economy. A Case of Pepukai Assurance Company," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 5(11), pages 58-73, November.
  • Handle: RePEc:ahd:journl:v:5:y:2024:i:11:p:58-73
    DOI: 10.37945/cbr.2024.11.07
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    References listed on IDEAS

    as
    1. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    2. Arjan Berkelaar & Roy Kouwenberg, 2011. "A Liability-Relative Drawdown Approach to Pension Asset Liability Management," Palgrave Macmillan Books, in: Gautam Mitra & Katharina Schwaiger (ed.), Asset and Liability Management Handbook, chapter 14, pages 352-382, Palgrave Macmillan.
    3. Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
    4. Steve H. Hanke and Alex K. F. Kwok, 2009. "On the Measurement of Zimbabwe’s Hyperinflation," Cato Journal, Cato Journal, Cato Institute, vol. 29(2), pages 353-364, Winter.
    5. Gautam Mitra & Elena Medova, 2010. "Asset and liability management/liability-driven investment for pension funds," Journal of Asset Management, Palgrave Macmillan, vol. 11(2), pages 71-72, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    pension funds; survival strategies; hyperinflationary economy; policies;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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