Pension funds top US$2,5bn on ZSE

billion.
A survey by Herald Business established that between 60 and 65 percent of the investments on the bourse are controlled by pension funds.
The ZSE is valued at US$4,2 billion, excluding shares registered outside the exchange. Globally, it is valued at US$4,6 billion.
The global register includes Class A shares owned by founder-members and shares registered outside the ZSE.
The National Social Security Authority and Old Mutual are the largest fund managers on the equities market, controlling more than 70 percent of the funds.
Fund managers also have huge investments in the property sector.
Some of the top asset managers include Imara, Datvest, ABC and SED Nominees who control the remainder of the funds.
As at December 31 2009, pension fund investments on the ZSE totalled about US$2 billion when fund managers were collecting an average of US$15 million a month.
The ZSE is currently subdued and pension funds are taking advantage of the low-priced stocks to consolidate their positions.
The Confederation of Zimbabwe Industries is lobbying Government to allow pension funds to use their resources to bail out ailing companies at market value.
CZI president Mr Joseph Kanyekanye said they were targeting US$600 million from pension funds.
Finance Minister Tendai Biti also wanted to use funds from NSSA to bail out Renaissance Merchant Bank now under curatorship.
Despite the liquid position of pension funds, only ZB Agro bills managed to get a prescribed asset status for the support of the agricultural sector.
Prescribed assets are charged at 5 percent in support of national programmes mainly roads, housing, water and sanitation.
A pension plan is a qualified retirement plan set up by a corporation, labour union, Government or other organisations for employees.
The primary objective of pension funds is to accumulate sufficient assets through contributions and investments income to satisfy all pension obligations of the contributor on a timely basis.
Many employees, both in the public and private sector, had their pension savings heavily eroded by inflation. This left employees with a double-barrel problem in that they toiled during their working days only to encounter the same fate when they opted for early or due retirement.
Meanwhile, the pension industry is expected to bounce back as more companies revive pre-dollarisation policies.