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Pension funds face scrutiny

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INVESTMENT returns and pension fund asset allocations will come under the spotlight next week as stakeholders meet at the 38th annual congress of the Zimbabwe Association of Pension Funds (ZAPF) in Victoria Falls next week, an executive with the institution has said.

Report by Clive Mphambela

In an interview with Business Digest this week, ZAPF director general Tendayi Kakora told NewsDay that this year’s congress will challenge the role of pension funds in the economic development of the country, as stakeholders explore the value that asset allocation decisions play in the delivery of sustainable investment returns on pension fund investments.

She said one of the main purposes of the conference was for delegates to share thoughts on how the industry can be revitalised so that stakeholder confidence in the sector is restored.

“The introduction of a multi-currency regime in 2009 entailed conversion of assets and liabilities of pension funds from Zimbabwe dollars to United States-dollar denominations. The low values that emerged have disappointed many active members of pension funds and pensioners. Confidence in pension as a source of retirement income provision has waned,” Kakora said.

The theme of this year’s four-day congress is “Regaining Stakeholder Confidence In Long Term Savings Through Reforms”.

“We have invited four international speakers and we are hoping that delegates will learn from the experiences of other countries that experienced hyperinflation and how they restored their economies, particularly the financial services sector.

Delegates will also get the opportunity to learn about pension reforms currently underway in other countries especially South Africa,” she added.

Kakora said 300 delegates drawn from pension fund administrators, principal officers, trustees, the investment management and banking industry and the insurance and pensions commission (Ipec) had signed up for the event.

Recently, Ipec issued a new set of asset allocation guidelines aimed at influencing positive performance of pensions and insurance fund investments.

She said the conference will explore whether these asset allocation limits will act as a signal of guidance towards the attainment of this goal.

The conference will discuss how retirement reforms impacted the industry in South Africa exploring the complementary role of the national social security scheme and occupational pension funds.

Delegates will also be advised on how to set investment performance benchmarks and assess overall fund performance and the determination of bonus calculations.

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