PUBLIC PENSION FUND MANAGEMENT AGENDA * Introduction * Good practices in industry * Results of GIPF * Short comings * Proposed regulatory changes * Closing Presenter: A.Jansen PUBLIC PENSION FUND MANAGEMENT GOOD PRACTICE INTRODUCTION
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* Good practices in industry
* Results of GIPF
* Short comings
* Proposed regulatory changes
FUND MANAGEMENTGOOD PRACTICEINTRODUCTION
* All pension funds are governed by the Pension Funds Act of Namibia of 1956.
* Around 400 registered pension funds
* We do not have a national pension fund covering all working citizens (shortfall).
* Registered funds covers 120 000 members of the 500 000 economically active Namibians.
(GIPF the fund I work for has approximately 70 000 members)
* Social pension (less than minimum wage) have 125 000 recipients.
1. Fully funded with assets invested in capital market(local and international)
- stock exchange
- bond markets
Reg.28: 35% Namibian assets ; Forex restrictions max 15 % offshore
2. Annual audits by independent auditors
3. Annual and Tri-annual actuarial valuations
4. Prudent investment guidelines
4.1 No investments in employer/sponsors
Registrar limited discretion to grant exemption
4.2 Maximum & prohibited investments
e.g. equity/stocks max -75 %
Unlimited investment – 5 %
No investments in coins & valuable artifacts.
- Pension Fund
- Provident Fund
- Retirement Annuity Fund
- Guaranteed funds (insurance companies underwrite)
* Preferential tax treatment of the :
- the contributors
- the funds themselves
- the benefits
FUND MANAGEMENTGIPF Average asset allocation
* Geographic: 15% International, 55 % RSA and 35% Namibia
* Across asset classes : 50-55 % Stocks , 30-35% Bonds 5-10% Real Estate and 5-10% Cash
5. REGULATIONS IN THE PENSION FUND ACT THAT IS IN PIPELINE
a) Funds must appoint own compliance officers
b) Changes to max holdings
c) Individual member choice
* for Funds going from DB to DC
* access to advisors
* suitable default portfolio
* compulsory information/education to members
5. REGULATIONS IN THE PENSION FUND ACT THAT IS IN PIPELINE (cont)
d) Funds compelled to seek expert advice
e) Compulsory to define,maintain and monitor investment policies
• Established as a juristic person
(to sue & be sued, collect own revenue)
• To exercise supervision, in terms of the act and other laws over the business of financial institutions.
• Revenues generated through levies on financial institutions under supervision.
• Private pension fund assets supervised including GIPF is in excess of 55 % of GDP
Thank you !