Insurance and Pensions Commission (IPEC), in its third quarter ending September report said the industry’s asset base grew in nominal terms by 123.65 percent to $241.65 billion from $108.05 billion recorded in the same period last year.
The regulator said if the asset base is converted into US$ at official exchange rate, the industry’s asset base grew by 107.52 percent to US$2.76 billion from US$1.33 billion for the period under review. However, the exchange rate distortion, particularly existence of alternative market, would give a different growth rate in terms asset trajectory in real terms.
The industry’s asset base of $241.65 billion translates to an average asset per member also including beneficiaries of $264,867 compared to $118,147.
Such an increase in the asset base was mainly driven by quoted equities and investment properties, which had a combined share of 82.24 percent of the industry’s total assets.
In the quarter under review, investment property grew by 54.70 percent, to $84.08 billion from $54.35 billion as at 30 September 2020. However, its contribution to the industry’s total assets declined from 50.30 percent to 34.79 percent as informed by a corresponding increase in the value of quoted equities, to improve the liquidity of the investment portfolios.
Quoted and unquoted equities increased by 283.36 percent and 59.47 percent, respectively as quoted equities increased to $114.66 billion from $29.92 billion while unquoted equities increased to ZW$6.06 billion from $3.80 billion during the period under review.
During the third quarter, listed equities held by the pensions industry accounted for 12 percent of the ZSE market capitalisation, indicating the significant role played by the industry on the capital market.
Whilst investment in unquoted equities increased by 59.47 percent, its proportion to total assets declined to 2.51 percent from 3.52 percent reported as at September 30, 2020. The decline is on account of revaluation of real assets.
The pensions industry continues to see an increase in contribution arrears as arrears increased by 164.06 percent, to $3.38 billion from $1.28 billion reported as at September 30, 2020.
Contribution arrears increase is mainly due to non-remittance of contributions by some sponsoring employers as they faced viability challenges as well as interest penalties on contribution arrears as required by the Guidance Paper.
The proportion of contribution arrears to total assets increased to 1.40 percent from 1.18 percent as at September 30, 2020. However, there was a decline in contribution arrears from 1.54 percent of total assets reported in the second quarter to 1.40 percent of total assets in the current quarter – Harare