Pension Funds should improve on disclosures to gain more trust: Govt

Pension Funds should improve on disclosures to gain more trust: Govt

By Insurance24

Vic Falls..Government wants Pension funds to improve their disclosure of information to both trustees and members to reduce complaints against their activities.

Speaking at the 43 annual congress of the Zimbabwe Association of Pension Funds (ZAPF) Vic Falls, Minister, Local Government, Public Works and National Housing, July Moyo said trust is key to ensuring confidence among stakeholders.

“Pension funds should improve their disclosure of information to both trustees and members to reduce complaints against their activities.

“There is need to create an environment of trust through good governance with appropriate jurisdictions to ensure the confidence of players and markets and this is critical in ensuring that confidence is instilled among stakeholders,” he said.

He said a number of governance and regulatory deficiencies were highlighted in the Commission of Inquiry Report on the conversion process of savings during the transition to the multi-currency regime in 2009.

Moyo said Pensioners contributions are the most sacred and taboo funds in corporate world to abuse.

He said good corporate governance is important because Pension Funds have a fiduciary role to ensure that pension contributions are managed for the benefit of members.

He added that an intergral part of the corporate governance system is the Board of Trustees.

According to Moyo, the Pension and Provient Funds Act is currently under review and the draft clearly spells out the duties and obligations of Trustees.

According to the Minister, Pension funds contribute over 50% of the trade on the Zimbabwe Stock Exchange (ZSE).

“The primary drivers of our listed equities market are foreign investors. Local Pension Fubnds then form a second tier in terms of activity albeit an important facet,” he said, adding that a significant propiortion of Pension Fund assets are invested in the property sector which has not been spared from the effects of deteriorating economy.

“Rental income is expected to provide cash flows to support pension pay outs to retirees at a time when tenants are increasingly finding it difficult to pay rentals whilst landlords can neither increase rentalas or fully maintain occupancy levels.”

Moyo challenged ZAPF to look into current and future innovations in administration saying that perhaps adoption of Blockchain technology will increase efficecny, transparency and trust in the administration of Pension Schemes.