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Pensions industry registers increase of 16.57%

• Pension net assets increased by K 1.41 billion.
• Total investment income increased to K443.38 million as at 30th June 2021.
• The increase was due to positive performances of local Government bonds, and treasury bills.

Pensions and Insurance Authority (PIA) says the Pensions industry recorded an increase on a year-to-year basis of 16.57% as at 30th June this year.
Authority Communications Manager Doreen Kambanganji told Money FM News that net assets rose by K1.41 billion from K8.51 billion as at 30th June 2020, to K9.92 billion as at 30th June 2021.
Ms. Kambanganji stated that total investment income increased to K443.38 million as at 30th June this year, from K345.42 million as at 31st March 2021, representing a rise of 28.36%.

She attributed the increase to positive performance of local treasury bills and bonds, as well as local and offshore equity investments.

“Return on average net assets as at 30th June 2021 was 17.83% as compared to15.29% as at 30th June 2020. Year-on-year inflation as at 30th June 2021 was 24.60% which may demonstrate that the purchasing power of pension funds was not preserved as the return on average net assets was 6.77% less than the inflation rate, she said”

Ms. Kambanganji added that the industry had a total of 246 registered pension schemes as at 30th June 2021, with active members accounting for 89,919, whereas deferred members were 5,838 while beneficiaries stood at 14,599.

“The investment portfolio of pension schemes as at 30th June 2021 was as follows: Government bonds, 20.81%; Property, 18.35%, Term Deposits, 18.99%; Equity (listed) , 12.71%; Offshore investment,11.32%; Collective investments, 5.95%; Equity (unlisted), 3.98%; Corporate bonds, 5.35%, Treasury bills, 2.37%; and other investments ( insurance policies), 0.16%, Commercial paper, 0.01%,” she stated.

Meanwhile, Ms. Kambanganji stressed the need for employers to ensure that they remit pension contributions on time, as there has been an increase in payment arrears by some employers.
She however said the Authority is cognizant of the financial challenges that most employers are facing due to the COVID-19 pandemic.
“While most pension schemes have performed fairly well during the COVID-19 pandemic, a few have been adversely affected especially in the tourism/hospitality and education sectors. The Authority has since engaged affected pension schemes in an effort to minimize the impact on affected pension scheme members.

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