By Business Reporter
The number of stand-alone funds for the quarter ending 31 December 2020 dropped to 15 schemes from 16, which was reported as at 31 December 2019.
The sector now comprises 9 defined contribution schemes, and 6, parastatal affiliated, defined benefit schemes following the transfer of Pentact pension fund to an umbrella fund under a life insurer.
Total membership (excluding beneficiaries) for stand-alone pension funds increased by 3.81% to 407 389 members from 392 450 members as at 31 December 2019.
The distribution of 179.08% and 655.66%, respectively.
Contribution arrears increased by 175% to ZW$1.32 billion from ZW$0.48 billion as at 31 December 2019.
Contribution arrears by stand-alone funds constituted 78.57% of the industry’s total contribution arrears and hence the need for arrears clearance strategy for the sector.
Furthermore, of the ZW$1.32 billion, 64.39% (ZW$0.85 billion) is owed to two funds (Mining Industry Pension Fund and Local Authorities Pension Fund).
Investments in prescribed assets increased by 579% to ZW$58 billion as at 31 December 2020 from ZWL0.10 billion in the previous year.
The ratio of prescribed assets to total stand-alone funds’ assets slightly
increased from 0.77% as at 31 December 2019 to 1.51%.
Despite the increase, the ratio is way below the minimum prescribed requirement of
20% and funds are encouraged to comply before regulatory measures are taken.
Arrear pension benefits increased to ZW$257.95 million as at 31 December 2020 from ZW$73.56 million as at 31 December 2019.
Unclaimed benefits increased by 1936.77% to ZW$ 397.17 million from ZW$19.50 million as at 31 December 2019.
As stated previously, the increase in unclaimed benefits was as a result of the previous exclusion of these benefits by some of the funds.
Total income for the period January to December 2020 was ZW$26.19 billion compared to ZW$10.12 billion reported for the same period during the previous year.
This income was mainly driven by fair value gains and contributions which constituted
84.28% and 7.74% of total income, respectively.
Rental income amounted to ZW$0.85 billion, up from ZW$ 0.08 billion reported for the same period in 2019.
Thus, rental income for the 2020 financial year constituted 3.26% of total income.
As at 31 December 2020, stand-alone funds were however owed ZW$0.28 billion in rentals and there is need for the funds to continue following up to ensure that tenants pay the rental arrears to avoid loss of value by scheme members.
Total expenditure for the period ending 31 December 2020 was ZW$2.15 billion.
Of this amount, ZW$1.46 billion (representing 67.91% of total expenditure), was benefit payments to scheme members.
Administrative expenses for stand-alone pension funds totalled ZW$0.55 billion for the period ending 31 December 2020.
This translated to the sector’s expense ratios of expenses to total income and to contributions of 2.10% and 27.09% respectively.
The 2020 expense ratios of 1.70% and 27.43 for the same period in 2019. Furthermore, the sector’s expenses to total realised income for the period under review was 17.96%.