BPOPF ups returns for members
Pauline Dikuelo | Tuesday December 15, 2015 18:00
According to the fund’s Chief Executive Officer, (CEO) Boitumelo Molefe, this was possible as they were able to retire some reserves, which helped them to bump up and distribute.
“Although our return to our active members rose, the return for our pensioners on monthly payouts declined marginally to 3.25 percent compared to 3.5 percent recorded last year. Even though it seems we have gone down from last year, our return to pensioners is still above the target on an annual basis,” said Molefe.
The CEO also said that on an annual basis, they try to build up reserves for pensioners so that even in a bad year, they can distribute something to them.
She noted that their target for distribution to profit pensioners is a rate of return which is equivalent to 80 percent of inflation adding that they need to ensure that pensioners’ returns never go down, as active and deferred members are the only ones that can have a negative return. “We cannot distribute a negative to pensioners unlike we do with active and deferred members who can get a negative return as a minimum a pensioner can get is zero percent,” she said. Currently, BPOPF has 7,477 pensioners who are receiving monthly payments from the fund. About 5,219 of them have opted to receive a with-profit annuity while 2,258 have opted for a non-profit annuity.
“With the non-profit annuity, they are guaranteed an increase inline with the fixed escalation rate,” she added.
The assets of with-profit pensioners are currently sitting at P4.7 billion compared to P4.4 billion recorded in the prior year.
Non-profit pensions sat at P1.5 billion while the prior year it was P1.4 billion.
BPOPF, whose total asset base currently stands at P51 billion, has 35 percent of its funds invested in Botswana through equities, bonds, property and private equity. Roughly, 65 percent of the funds are invested offshore in vehicles such as equities, bonds and alternatives.
Last year, the fund also launched a P800 million local private equity fund, P500 million of which was awarded to Capital Management Botswana with the remainder invested into the development of a soon to be built Hilton Hotel in the new CBD.