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Investments of the National Pension Scheme Authority, ZAMBIA PowerPoint Presentation
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Investments of the National Pension Scheme Authority, ZAMBIA

Investments of the National Pension Scheme Authority, ZAMBIA

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Investments of the National Pension Scheme Authority, ZAMBIA

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  1. Investments of the National Pension Scheme Authority, ZAMBIA Presented by Dann Kunda Musenge Seychelles, October 2006

  2. Introduction • ZNPF from 1966 to 2000 • NAPSA came into being 1st February 2000 • NAPSA has custodial responsibility over ZNPF assets and liabilities • ZNPF was defined contribution and mainly paid lump sums • NAPSA is defined benefit with benefits which are adjusted in line with NAE

  3. Governance Structure • Overseen by Ministry of labour and Social Security • Minister appoints Board • Board is tripartite with some private sector representation by BOZ, BAZ, ZAPFM • Committees - Investment, Staff and Audit

  4. Allowable asset classes • Equities of listed companies • Real estate – residential, office, industrial etc • Government securities- Bonds and Treasury Bills • Fixed term deposits • Fixed income securities – corporate bonds • Collective investment schemes • Offshore investments

  5. Prohibited Investments • Direct lending to Govt and parastatals • Cos without three year profitability history • Cos with wide ownership structure • Speculative investments involving forward contracts, options or other for of derivatives • Holding more than 5% of equity in any one Co • Lending or leasing activities in non-listed entities • Cos that do not observe good corporate governance

  6. Investment Objectives • Capital preservation • Maximisation of investment returns within acceptable levels of risk • Security of assets • Diversification / spread • Liquidity • National development & Social investments - housing, hospitals, schools are not explicitly defined in the guidelines

  7. Asset Allocation Rules • Asset allocation rules ( what % ranges should be applied to each asset class in the portfolio) • Planned to have up to 30% of the total fund invested offshore

  8. Offshore Investment • Appointment of Global Custodians – advanced two institutions shortlisted • Appointment of External Fund Managers – awaited • Appointment of International Trustee – awaited • Consultative process on-going

  9. Social Investments • Mainly in real estate developments • Increasing calls to support Infrastructure type investments • Policy guidelines required and harmonisation of governance regimes • Special Purpose Vehicles being created

  10. Conclusion • Challenges of balancing scheme member priorities with the competing calls to support social investments • Review of Investment Guidelines and Asset Allocation Rules • Limited investment opportunities, underdeveloped market, illiquidity nature of some investments, absorptive capacity etc • Consultations on-going