Investment property/Equities boost pension’s industry asset base
Staff Reporter
HARARE, The pensions’ industry’s asset base increased by 175,8% to ZW$16,41 billion ( in nominal terms) in the FY December 2019 from ZW$5,95 billion as at 31 December 2018 to $16,41 billion as at 31 December 2019 although it has declined in real term to USD$ 0,98 billion in real terms during the same period.
The growth (73,65%) in the industries asset base as at December 2019 from the September 2019 figure was driven by driven by an increase in the values of investment properties and equities which accounted for 79,19% of the industry’s assets.
IN its Q4 2019 industry pensions industry report, the Insurance and Pensions Commission (IPEC) said Investment property increased from $3, 42 billion as at 30 September 2019 to $7,39 billion as at 31 December 2019.
The proportion of investment property to total assets also increased to 45,06% as at 31 December 2019 from 36,16% as at 30 September 2019.
“Quoted equities investment increased by 44,71% from $3,71 billion as at 30 September 2019 to $5.37 billion as at 31 December 2019, on account of an increase in the values of shares on the Zimbabwe Stock Exchange.
“Investment property and equities continued to reprice faster than all other asset classes, thus diluting exposures to these assets. As a result, investment property and equities were valued at $12,99 billion, accounting for 79,19% of total industry assets,” said Ipec.
Notwithstanding the increase in absolute values of prescribed assets from to $1,22 billion as at 31 December 2019,$722,12 million recorded as at 30 September 2019 , Ipec said compliance was still low at 7,42 % against the regulatory minimum of 20%.
During the period, total income for the industry for the year ended 31 December 2019 was $9,59 billion compared to $1,8 billion for the same period in 2018 driven by interest from investments and fair value gains amounting to $8,01 billion.
Total expenditures for the industry amounted to $599,45 million out of which $416,14 million was for pension benefit payments for the period under review.
The industry recorded a significant increase of a surplus of $8,99 billion as at 31 December 2019 from the figure of $1,4 billion recorded in December 2018.
