Status of Pensions Industry in Zambia
The Pensions and Insurance Authority wishes to update the public on the status of the pensions industry in Zambia. The pensions industry has remained stable and over the past five years, the net pension’s assets have increased from K3.6billion to K5.9billion with a total membership of 109,734 as at 31st December 2016. Currently, we have 242 registered pension schemes managed by various registered Fund Managers and Administrators.
Over the last few weeks media articles have been circulating on Saturnia Regna Pension Fund regarding various issues which the Authority brought out during an inspection of the Fund. The report was sent to the Trustees of the fund for implementation of the recommendations from the Authority.
With regards to the court cases, the Authority has been actively monitoring the two court matters between the Trustees of the Saturnia Regna Pension Fund and service providers namely Benefits Consulting Services Limited and African Life Fund Services Limited. The first matter was between the Trustees and African Life Financial Services Zambia Limited under cause No 2016/HP/ARB No. 0011 and related to the composition of the Board and contractual services. This matter has since been discontinued.
The claim under the second matter is identical to the first court matter except that the action was commenced by Mr Hantuba Munakupya against Saturnia Regna Pension Fund and the Trustees and is under cause No. 2017/HPC/ARB No. 0067. Under this matter the applicant Mr Hantuba had obtained an interim injunction dated 16th February 2017 which rendered it impossible for the scheme and trustees from carrying out any business of the scheme.
Prior to the grant of the said Injunction Order the Fund was scheduled to hold an AGM at which forum new trustees were scheduled to be voted into office but this could not be held on account of the injunction. The injunction was subsequently discharged on the 3rd May 2017 and this has now paved way for the holding of the AGM.
In our view the holding of the AGM and election of new Trustees will normalise the composition of the Board of Trustees and attendant matters.
To prepare for the AGM the Authority convened a joint meeting between the Trustees and Benefits Consulting Services Limited on the 26th May 2017. During the meeting, the Authority after deliberation directed that the AGM be held on or before the 14th July 2017 and that Trustees whose mandate has expired be allowed to operate until the AGM so as not to create a vacuum between now and the AGM.
Further, the Authority wishes to inform the public that off shore investment of pension funds, which have also been a subject in the media articles, is not illegal but is subject to ministerial approval. All investments are done to enhance value of the members’ accrued benefits via diversification of the investment portifolio with the approval of the Trustees. The Authority further wishes to state that industry is guided by Investment Guidelines and any scheme that does not adhere to the guidelines is dealt with accordingly.
The public may wish to know that one of the statutory duties of the Pension and Insurance Authority (PIA) is to ensure that there is stability in the industry. The Authority undertakes inspections of all schemes to establish their financial soundness and compliance to the attendant legislation. From the assessments done so far, the pensions industry is stable and members’ accrued benefits are safe.
Further, the Minister of Finance, Honourable Felix Mutati has since directed the Pensions and Authority (PIA) to appoint an independent auditor to verify the matters regarding the Saturnia Regna Pension Fund.
The Audit will be undertaken within the next 30 days.
Pensions and Insurance Authority