The Pension industry reported a surplus of $620,12 million for the year-ended December 31, 2018 from $426,40 million reported last year, buoyed by gains on equities and contributions, the latest Insurance and Pension Commission (Ipec) report shows.
By Fidelity Mhlanga
“The total income ($989,5 million) was mainly driven by fair value gains on equities and contributions, accounting for a combined $714,88 million and 72,24% of total income for the period under review. The fair value gains on equities were $379,16 million for the period under review, compared to $139,08 million for the same period in 2017,” Ipec said.
Total contributions were $335,7 million by end of 2018.
On a quarter-to-quarter comparison, the industry’s asset base jumped 12,26% to $5,22 billion during the three months ended December 31, 2018 from $4,65 billion reported in September.
“The growth in the asset base was mainly due to an increase in the values of quoted equities from $1,40 billion as at December 31, 2017 to $2,46 billion as at December 31, 2018. The increase in the values of quoted equities was mainly a result of a bull-run on the Zimbabwe Stock Exchange during the period under review,” Ipec said.
The industry’s total liabilities amounted to $5,28 billion, against total assets of $5,22 billion as at December 31, 2018, representing a mismatch of $67,09 million.
The mismatch was mainly a result of defined benefit liabilities not being fully funded by the respective sponsoring employers.
The industry reported pension-benefit arrears totalling $72,54 million as at December 31, 2018, up from $72,31 million reported in the period ending September 30, 2018.
Unclaimed benefit liabilities declined from $28,03 million as at September 30, 2018 to $27,01 million as at December 31, 2018. Ipec urged pension funds to come up with strategies to identify and inform members with unclaimed benefits or their beneficiaries to reduce the magnitude of the liabilities.
Total expenditure during the period under review was made up of pension benefits totalling $265,16 million and administration expenses (calculated as total expenditure, excluding items such as expenditure on benefits, transfers to reserves and revaluation reserves) totalling $104,32 million.