Judith Phiri, Business Reporter
THE Insurance and Pension Commission (IPEC) says the pension industry total income increased significantly to ZW$310 billion for the half year ending 30 June 2022, an increase of 95 percent driven by fair value gains on investments, interest from investments and contributions.
In its 2022 pensions second quarter (Q2) report for the quarter ended 30 June 2022, IPEC said the pension industry witnessed a total income of ZW$310 billion compared to ZW$55 billion the same period last year.
“The total income for the half year ending 30 June 2022 was ZW$310 billion compared to ZW$55 billion for the half year ending 30 June 2021. This translates to a nominal increase of 468 percent and a real increase of 95 percent. Total income was mainly driven by fair value gains on investments, interest from investments and contributions, which constituted 59 percent, 20 percent and 7 percent of total income, respectively.”
The Commission said there were 978 registered occupational pension funds as at 30 June 2022 compared to 972 funds as at 30 June 2021 and the increase was mainly due to newly registered funds over the period under review.
IPEC said 615 were active, constituting 63 percent of the industry funds, while the remaining 37 percent were either paid up or undergoing dissolution as per the Dissolution Directive issued by the Commission to dissolve inactive funds.
The Commission added: “The industry’s total membership including beneficiaries, increased by 7 percent from 915 975 as at 30 June 2021 to 976 060 as at 30 June 2022. This was mainly as a result of the new funds.”
IPEC said the industry’s assets as at 30 June 2022 stood at ZW$800 billion, which was a nominal increase of 304 percent from a value of ZW$198 billion as at 30 June 2021.
While, investment properties accounted for ZW$298.56 million as at 30 June 2022 compared to ZW$74 million during the comparative period last year, which was a nominal increase of 303 percent.
The equities had a nominal increase of 250 percent from ZW$343 million as at 30 June 2022 from ZW$98 million as at 30 June 2021 and this was mainly attributable to fair value gains and acquisition of equities from contributions received by pension funds.
“Prescribed assets amounting to ZW$63 billion, constituted 8 percent of the industry’s total assets as at 30 June 2022. This was an increase of 772 percent from the prescribed assets investments of ZW$7 billion as at 30 June 2021.
“The increase was mainly due to the industry investing in prescribed assets in compliance with regulatory requirement of 20 percent. As at 30 June 2022, 16 pension funds had met the required regulatory minimum requirements. The Commission continues to enforce industry compliance with the approved instruments,” added IPEC.
However, the Commission said the total expenses amounted to ZW$20 billion for the period-ended 30 June 2022, reflecting a nominal increase of 274 percent from expenses of ZW$5 billion for the comparative period ending 30 June 2021. This translates to a real increase of 28 percent.
IPEC said benefit payments, administration expenses, including staff costs and investment management expenses were the major drivers of expenses constituting 71 percent, 11 percent and 7 percent of the industry’s expenses, respectively.