Pension funds cash pile worries regulators

Both the Bank of Botswana (BoB), which regulates commercial banks, and the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), which oversees retirement funds, believe more pension capital should move beyond bank deposits into longer-term investments.

The concern is not that pension funds or commercial banks should not hold cash, but that large institutional deposits have remained a persistent feature of the financial system even as billions of pula have been brought back into Botswana under Pension Fund Rule 2 (PFR2). Pension funds held P14 billion in cash as at June, compared with P23.3 billion invested in locally listed equities. Total industry assets stood at P176.4 billion during the period.