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Tapiwanashe Mangwiro
Senior Business Reporter
The Insurance and Pensions Commission (IPEC), says total industry assets grew, in nominal terms, by 123,65 percent to $241,65 billion, in the third quarter to September 30, 2021, from $108,05 billion in the same period last year.
IPEC noted that, if converted into US dollars at the official exchange rate, the industry’s asset base grew by 107,52 percent to US$2,76 billion from US$1,33 billion during the period under review.
However, the exchange rate distortion, particularly the existence of the alternative market, would give a different growth rate in terms of asset growth trajectory in real terms.
The industry’s total asset base, at $241,65 billion translates to an average asset per member (including beneficiaries) of $264,867 compared to $118,147 for the same period last year.
According to IPEC, the 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.
Investment property grew by 54,70 percent, to $84,08 billion from $54,35 billion as at September 30, 2020.
However, property 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 at $114,66 billion $29,92 billion and $6,06 billion, respectively during the third quarter the period under review.
IPEC said listed equities held by the pensions industry accounted for 12 percent of the Zimbabwe Stock Exchange 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 these 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.
Online Reporter