An elaborate looting scheme by the Municipal Councillors' Pension Fund has been uncovered and the Hawk's are investigating the case.
PRETORIA, SOUTH AFRICA - NOVEMBER 6: Reserve Bank Governor Gill Marcus shows off the new banknotes, which feature an image of former president Nelson Mandela on the front and images of the "Big Five" wild animals on the reverse, before conducting the first transaction in on November 6, 2012 in Pretoria, South Africa. (Photo by Gallo Images / Foto24 / Brendan Croft)
Curators have referred the Municipal Councillor’s Pension Fund (MCPF), that has almost 6,000 members, to the Hawks due to mismanagement of funds, theft, corruption and fraud.
What is contained in the Isago deal?
The irregularities have been reported under the Prevention and Combating of Corrupt Activities Act. The North Gauteng High Court granted the Financial Sector Conduct Authority’s (FSCA) request for the MCPF to be placed under curatorship last year.
Some of the glaring irregularities that Juanito Damons and Thabang Kekana, who were MCPF curators, reported purchases from Isago@N12 Development for R120m and an additional amount of just under R17m for VAT, despite the properties registrations being under the MCPF.
Although the 11 vacant stands the MCPF acquired in Klerksdorp, North West, were valued at R46.6m, they were bought for over R136 million. A 12th property was bought for R65m, with an assessed value of R40m.
As no settlement could be reached with Isago concerning the repayment of the R120m plus the R16.8m paid for VAT, Damons and Kekana have instituted legal action.
The MCPF suspiciously overpays more property prices
A Willows Office Park property in Midrand was also reported to the Hawks after it was discovered that its ‘forced sale’ value was just under R42.9m and its ‘fire sale value’ at R55.1m.
The joint report, filed by the curators, in the North Gauteng High Court earlier this year, stated:
“This is in stark contrast to the purchase price of R70m paid by the MCPF.”
Three of the fund’s tenants have accumulated rental arrears of over R1.3m at the office park.
The law firm that oversaw the Isago deals
Maluleke Seriti Makume Matlala (MSMM) Incorporated, the legal firm that oversaw the Isago deal, has been referred to the Law Society of the Northern Provinces.
The firm reportedly charged
“unconscionable, excessive and extortionate fees and in doing so grossly overcharging the MCPF.”
The law society has assured that it will look into the claim thoroughly.
Due to the critical nature of the situation, the Political Office Bearers Pension Fund (POBPF) has been approached by the South African Local Government Association (SALGA) concerning a merge with MCPF.
The POBPF caters to MPs, MECs, premiers, deputies, cabinet ministers, premiers and provincial legislators.
Source: The south african
The average South African private pensions pay-out
The average South African private pensions pay-outs has increased by 15.2% in real terms over the past five years between January 2013 and February 2018.
Private pensions in some ways is outpacing take-home pay, according to a new report published by BankservAfrica and Economists.co.za.
The BankservAfrica Private Pensions Index (BPPI) is the first time-series on private pensions as paid into bank accounts around the world. The system currently accounts for 900,000 people receiving private pensions of which BankservAfrica captures 680,000 or 75%.
With South Africa holding the eighth largest pension fund assets in the world and over 16.6 million pension fund accounts, the BankservAfrica Private Pensions Index is significant for the country. The index provides a monthly view of private pensions’ performance and trends in South Africa, which includes the observation that private pensions have proved to be a resilient inflation beater over the years.
According to BankservAfrica’s data, in January 2013, 59.1% of all private pension pay-outs were less than R4,000 per month. About 30% of pensioners received between R4,000 and R10,000 while just under 10% were paid between R10,000 and R25,000.
Out of all pensions received, 0.8% were between R25,000 and R50,000 while 0.3% received over R50,000 in their bank accounts for the month, said Mike Schüssler, Chief Economist at Economists.co.za.
By February 2018 the share of private pensioners receiving less than R4,000 dropped to 43% while 34.1% received between R4,000 and R10,000, BankservAfrica said.
The biggest increase was the share of private pensions receiving between R10,000 and R25,000. This doubled to 20.6% in 2017 from less than 10% in January 2013.
The same also occurred for those receiving R25,000 to R50,000, which went from 0.8% share of private pensions to 2.1% with those receiving more than R50,000 per month increasing slightly to 0.4% from 0.3%.
The value of the average private pension pay-outs increased by 50.1% between January 2013 and February 2018 in nominal terms, BankservAfrica said. In real terms, the five-year average value of private payments increased by 15.2%.
In February 2018, the typical private pension pay-out was R4,870 per month.
It is not only the growth of pensions that is important to the economy but the fact that average take-home pay showed practically no growth above the rate of inflation in the five-year period. Private pensions, on the other hand, grew by over 15%.
“The growth in both average and median pensions is probably due to higher than inflation interest rates as equities did not fare quite as well,” said Schüssler.
He pointed out that the retirement population of 60 years is growing at a rate of 3.4% a year.
Government: Civil servants to pay for retirement
Treasury Cabinet Secretary Henry Rotich
Civil servants’ payslips will from January 2019 come with an extra hole after the Government made good its intention to make its workers pay for their retirement. For many years now, civil servants have been enjoying pension without contributing towards their retirement. ALSO READ: How to minimise your tax burden legally But starting January next year, 7.5 per cent of civil servants’ gross salary will be deducted as pension payment. This is part of Treasury's efforts to implement an International Monetary Fund-backed plan where the Government will cut back on its spending and increase tax revenues. Those targeted by the new scheme are mainstream civil servants, teachers and members of the disciplined forces. The Government, the sole contributor to the civil servants’ retirement kitty, will contribute 15 per cent of the gross salary. The implementation of the new scheme was expected to begin in September but was pushed to January 2019 after consultations with stakeholders that saw Parliament reduce the budget for the scheme to Sh10 billion from Sh15 billion. “I know we have to do it this time round,” said Treasury PS Kamau Thugge, who also noted the Government had always wanted to move to a defined contribution pension scheme. “I am really hopeful this time we will start it, hopefully in January,” said Dr Thugge, when Kenya signed the UN Development Assistant Framework in Nairobi yesterday. For the past 12 years, the Government has been trying to implement a contributory pension scheme with little success. ALSO READ: What you really need to be saving revealed However, with a cash-strapped Government that has promised the IMF that it will tame its debt appetite as a condition to accessing a $1.5 billion standby credit facility from the Washington-based lender, Treasury is keen to see the scheme implemented. Thugge said the delay in implementation was due to Parliament's reduction of funds to the proposed scheme. CS Henry Rotich had said the scheme would start in October, allocating it Sh15 billion. “The Government has allocated Sh15.3 billion to the scheme in 2018/2019, projected to rise to Sh33.8 billion over the medium term,” said Mr Rotich.
Source; standard media
Retirees face bleak future as pension scheme funds fall
Zamara Fanaka Retirement Fund Investments, Asset Consultant, Neha Datta (left) with Chairperson Lucy Kambuni and Deloitte Senior Manager-Audit, Fredrick Odero, during Zamara Fanaka Retirement Fund Investments meeting in Nairobi on Tuesday, April 17 2018.[David Njaaga,Standard]
Kenyan retirees earn much less than the world’s recommended income due to a poor saving culture and high taxation of pension schemes, experts say. According to data from Zamara Fanaka Retirement Fund, Kenyans retiring at age 55 and above live on about 22 per cent of their pre-retirement salaries, against the global market’s recommended standard of 66 per cent. The Zamara chairperson, Lucy Kambuni, said in Nairobi last week that pension laws should be amended to accommodate more citizens, including those not in formal employment. “There is a need for introducing tax incentives on funds held by pension firms as part of key reforms required to enhance the growth of the sector,” said Ms Kambuni. “This would help trustees in diversifying the asset base of funds, which would in the long run improve the returns for retirees at a time when many Kenyans are grappling with the high cost of living.” She was speaking in Nairobi during the fund’s annual update of its investment plans to its members. Zamara Executive Director James Olubayi said the law capping the tax allowable retirement contribution at Sh20,000 had remained unchanged for over two decades and should be reviewed to improve returns for retirees. “The rate at which many Kenyans are retiring and thereafter living in abject poverty is worrying,” said mr Olubayi. “The Government ought to safeguard this population by entirely overhauling retirement policies to grow the industry instead of piecemeal reforms that are normally effected during budget review.” WORKING KENYANS According to data from the Retirement Benefits Authority (RBA), more than 12 million working Kenyans have yet to be enrol in any formal pension plan. Another 10 million who are not employed may not be saving for their retirement. According to Olubayi, it could be difficult for most of the so-called millennials - those born between 1981 and 1991 - to retire comfortably because most of them have other important competing needs than saving for retirement. “With current unemployment rates at a high of 39.1 per cent, there is almost no disposable income to set aside for retirement saving,” he said. According to RBA, retirement funds in Kenya hold about Sh1 trillion in assets. In his 2015/16 budget speech, National Treasury Henry Rotich said pension funds could invest up to 10 per cent of their portfolio in private equity and venture capital funds licensed by the Capital Markets Authority. According to Oxford Business Group, such reforms offer greater investment options and would help the sector grow.
Source: standard media
Ghana’s pensions regime requires urgent reforms - Vice President Bawumia
H.E. Dr Mahamudu Bawumia, Vice President
Vice president of the Republic, H.E. Dr Mahamudu Bawumia, has called for major reforms in pension administration in Ghana.
Dr Bawumia is particularly worried about the growing pensions bill for non-contributors, who continue to draw larger amounts from the Consolidated Fund than those who have contributed during their working life due to the various pension schemes in operation.
He is therefore calling on stakeholders to see to the full implementation of the National Pensions Act, (Act 766, 2008) which mandates the unification and harmonisation of pension schemes in Ghana in order to ensure equity in pension payments.
According to Vice President Bawumia, “Prudent management of our pension resources is imperative and unification seems inevitable if we are committed to creating prosperity and equal opportunity for all. The continuing existence of non-contributory schemes contradicts the provisions of Act 766 which call for unification. Unchecked, the proliferation of different pension schemes will only add to the current challenges which unfortunately have kept out a large segment of the population, including farmers from any form of pension entitlement. This must change to ensure social equity”.
Vice President Bawumia made the call when he addressed participants at a high level stakeholder meeting on Unification of Pension Schemes in the Public Sector in Accra on Wednesday 25th April, 2018. The meeting is being attended by major stakeholders in the management and administration of pensions in Ghana, including officials of the National Pensions Regulatory Authority (NPRA), Trades Union Congress, Controller and Accountant General’s Department, Bank of Ghana and the Ministry of Finance and Economic Planning.
Citing figures to buttress his point, Vice President Bawumia indicated that the growing gap between pensioners under the contributory and their non-contributory counterparts was unacceptable, and urged policymakers and administrators to ensure there is equity.
“We see that the average pension benefits under the contributory scheme is less than that of a non-contributory scheme. In 2016, a pensioner under the contributory scheme received on average GHS 127 monthly less than the pensioner under the non-contributory scheme. The gap widened to GHS 222 in 2017. The prediction is that the gap will widen over time.
“As policymakers and public administrators, we are faced with a basic benefit and fairness question: How can those who make no direct contribution to their retirement earn more in pension benefits than those who make direct contributions to their retirement through payroll deductions? There is good reason why more people under non-contributory schemes are tempted to opt for early retirement. They are better off in retirement than the average worker.”
He warned of the dangers of maintaining the status quo, arguing that the rising pensions bill was not sustainable.
“Future governments should not have to resort to borrowing with its accompanying interest costs to pay pension benefits to retirees. Any government that resorts to this kind of borrowing cannot build a resilient economy.”
Source; Ghana web
MTN Ghana launches trader’s pension scheme
MTN Ghana has launched a new initiative dubbed; ‘My Own Pension” to enable traders in the informal sector to save some money for their retirement just as the formal sector.
“My Own Pension,” which goes with the slogan “Pension Papa Paa,” seeks to bridge the gap between the sectors to enable traders to have a capital to rely on when no longer in active service. This is a voluntary retirement pension plan, which provides secured retirement income to individuals and only MTN Mobile Money (MoMo) subscribers can access the service for convenience and settlement.
It is open to individuals aged 15 years and above. One can choose any of the flexible minimum contributions of GH¢1.00 daily, GH¢5.00 weekly and GH¢20.00 monthly.
Mr Seth Obiri, the Managing Director, United Pension Trustees, said customers need to dial *170# on their phone to select option nine for Pensions and Insurance, follow the prompt, select option one for ‘My Own Pension’ and select option one again to enrol for successful registration.
The initiative, after successful registration, gives customers two benefits of savings, from which they can withdraw after a year of pension. Mr Eli Hini, the General Manager of MTN Mobile Financing Services, said data from the National Pensions Regulatory Authority (NPRA) indicate that 85 per cent of Ghana’s labour force was in the informal sector.
This situation, he said, needed structured pensions systems to play a critical role in providing the necessary income for elderly populations and alleviate post-retirement poverty in the country, hence the initiative.
The number of the informal sector workers who had access to social benefits through institutionalised social security schemes was negligible, therefore, leaving an overwhelming majority of Ghana’s labour force out of structured pension arrangements. Mr Hini said the informal sector workers did not see the need to participate in voluntary pension systems and even comply with mandatory schemes because they saw the strict criteria involved as time consuming and the paperwork cumbersome.
“This has been a challenge. However, this need must be met. It has become necessary to find ways that provided enough flexibility and simplicity to enable workers in the informal sector to access pension benefits,” he stated.
He gave the assurance that MTN was committed to ensuring that customers enjoyed brighter lives not only during their active working years but also in retirement and encouraged them to take advantage of the service.
Mr Ignatius Baffour Awuah, the Minister of Employment and Labour Relations, in a speech read on his behalf, commended MTN and its partner for coming out with the initiative, which falls in line with government’s policies.
He said for MTN and the United Pension Trustees to have such a flexible pension scheme for the informal sector epitomizes the conviction that formalisation of the informal economy would be all-inclusive.
“All these efforts are in tandem with government’s vision of formalizing the economy to accelerate economic growth and sustainable development,” he said. The Ministry, in collaboration with key stakeholders, had developed an informal economy roadmap to facilitate the transition from the informal to the formal economy.
This, he added, would be validated and launched in due course for mainstreaming and implementation. Nana Appiagyei Dankawoso I, the President of Ghana Chamber of Commerce and Industry, said people retired early and became rich while others retired late and became poor, and this could be attributed to poor planning.
He, therefore, advised individuals to always set their priorities right by attaching much importance to the ‘My Own Pension scheme so that they could support themselves during retirement. He encouraged Ghanaians in the private sector to learn more about what was available so they could enrol and get the best retirement package for themselves.
Mr Harold Awuah Darko, the Chairman, United Pensions Trustees, expressed gratitude to MTN for sharing in their vision of making pensions available to everyone everywhere.He urged the traders to start investing early to enable them to build their pension to reap more benefits in the future.
Source; business ghana
Bona Life closes shop
Troubled life insurance company, Bona Life, earlier today shut its doors indefinitely, marking the culmination of a bitter shareholder dispute that traces back to the P400 million battle between the Botswana Public Officers Pension Fund (BPOPF) and asset management firm, Capital Management Botswana (CMB).
: Reginah Sikalesele Vaka PIC. MORERI SEJAKGOMO
Bona Life holds about P800 million in annuities from nearly 1,000 clients. The company’s 20 permanent employees in Gaborone and Francistown were sent home yesterday, while the regulator, the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) was said to have been informed of the closure.
It is expected that the regulator will take control of the life insurance company, following the latest developments.
Bona Life CEO, Regina Sikalesele-Vaka confirmed the company’s closure, adding that the move was due to the lack of a board, a situation which has hounded the firm for months.
Bona Life is owned by Foudello, a company in which the Botswana Opportunities Partnership (BOP) holds 40%, CMB 25%, Sikalesele-Vaka 25% and staff 10%.
BOP is a fund that at one point housed more than P400 million in investments funded by BPOPF and managed by CMB, before the hostile fallout late last year in which the pension fund accused CMB of attempting to make off with the pensioner-funded BOP.
As the pension fund and its asset manager locked horns, Bona Life reported CMB to NBFIRA for allegedly mismanaging P133 million of its own funds handed over for investment. CMB retaliated by slapping Sikalesele-Vaka with a P650 million letter of demand citing alleged misgovernance. The asset management fund also attempted to fire the CEO..
With hostilities rising, Bona Life’s board, on which BPOPF and CMB representatives sat with Sikalesele-Vaka and others, crumbled as the shareholders battled in the courts.
The CEO told Mmegi that the decision to close followed the failure of a process to appoint a new board to usher Bona Life back to stability.
“We have been trying to find a breakthrough and as management when we looked at everything critically, we found that the biggest enemy of progress was the lack of a board.
“The regulator said there needs to be a board and as shareholders we need to nominate directors. We had a meeting with all the shareholders and the function was given to me to nominate them, which I did and forwarded names to the regulator, BPOPF and CMB.
“I believed this was a big breakthrough, but on June 27,
CMB said they wanted their owner, Tim Marsland and someone else he had chosen, put on the board as well,” she said.
Marsland, a South African national who established CMB at least six years ago, is reportedly being probed by the Financial Intelligence Agency and the Directorate on Corruption and Economic Crime in connection with the P400 million saga, which would impede his vetting by NBFIRA for a place on the Bona Life board.
Efforts to contact Marsland for comment were unsuccessful by late this evening.
“June 29, which was our date for the signing of the resolution on this matter, came and went without signatures, without a board constituted and there was no choice but to close the office.
“The closure is designed to protect our clients from exposure to a situation where a company is operating without board control.
“We have received money from Batswana. Batswana have been very supportive of this company, creating it from nothing. We have a responsibility to look after and protect them.
“Our policyholders have to understand that this action has been taken to protect them and for as a long as it operates without a board, they are exposed. Even the attempt to fire me without a board in place, exposed them to certain risks.”
Sikalesele-Vaka said there were no guarantees available to Bona Life’s clients.
“If you are trading or operating in an environment that is very uncertain, you cannot given anyone a guarantee. I cannot say people should not worry; maybe they should be very worried.
“What I can say is that we are trying very hard to make sure that they are protected but we cannot give guarantees.
“What we can say is that as far as we are concerned, we have kept NBFIRA informed and part of the regulator’s mandate is to make sure the public is not prejudiced.”
NBFIRA officials could not be reached for comment this evening. The regulator is due back at the Court of Appeal on Thursday for the matter in which they are attempting to place CMB under statutory management in relation to the P400 million case.
Pension fund investments fall P6.7bn
The value of assets held by the country’s pension funds locally and externally fell by P6.7 billion between January and February 2018, latest figures from the Bank of Botswana indicate.
: Pensioners PIC. THALEFANG CHARLES
According to the data, the slump was due mainly to a 40% drop in the value of bonds held offshore by the local pension funds. The value of bonds held offshore fell to P5.8 billion in February, a month in which most other asset classes invested in by the pension funds were also weaker.
The central bank’s numbers indicate that offshore equities remain the most popular asset class for local pension funds, with 51% of their total
assets of P76 billion invested there. The value of local pension fund assets invested in offshore equities fell by P1.8 billion in February, while holdings of domestic equities fell by P65 million to P14.3 billion.
Local pension funds have come under increased scrutiny in recent months due to the highly publicised legal troubles around the Botswana Public Officers Pension Fund (BPOPF). The BPOPF accounts for the lion’s share of pension fund assets in Botswana.
Africa’s Pension Fund Assets
Pension funds globally have become significant investors, both as fiduciaries in global capital markets and in their capacity as investors in local and international development projects. At the end of 2014, global pension fund assets  were estimated at USD 36,119bn, representing a 6.1% rise from the 2013 year-end value. On average, these assets account for 84.4% of these countries’ GDP.
The US continues to be the largest market at USD 11,690bn with Japan and the UK at USD 2,954bn and USD 1,755bn respectively. Together they account for more than 78.3% of total pension assets.
Africa is characterised by a diversity of cultures, with different social and economic factors driving capital market development, performance of asset classes, as well as currency movements. An aggregate estimate of pension assets for the continent is therefore on a best endeavours basis and can be time sensitive due to factors such as currency volatility. Our review uses 16 countries in Africa, representing circa 65% of Africa’s 2014 GDP as measured by the IMF, and also those with significant economic influence in each region. An aggregate number hides variation between countries, while currency volatility increases the fluctuation of USD equivalent amounts. Pension fund assets in Africa are currently estimated at USD 334bn representing only 20.7% of these countries’ GDP.
 Towers Watson Global Pension Study, 2015. Estimated using the sixteen major pension markets.
 GDP, Current Prices, IMF 2014, USDbn
Similar to the global picture, the same big-country bias is present in Africa with 90% of the assets concentrated in Nigeria, South Africa, Namibia and Botswana. Within these countries, a number of large funds also tend to dominate. Examples include Government Employees Pension Fund (GEPF) in South Africa, Government Institutions Pension Fund (GIPF) in Namibia, Botswana Public Officers Pension Fund (BPOPF) in Botswana and a number of larger vehicles in Nigeria.
Pension fund assets globally are on the increase as countries move from unfunded to funded (or partially funded) status, and as many outsource pension fund management to private firms and move from DB to DC schemes. According to estimates by the OECD, private pension fund assets globally grew at an average annual growth rate of 8.2% over the period 2009 to 2013, overshadowing insurers and investment companies. In Africa, pension fund assets continue to grow for similar reasons, alongside an increase in coverage, as social security is extended to a larger portion of the population, formal and informal. The pension fund industry in Nigeria for example has grown from Naira 815bn in 2007 to Naira 5.492 trillion in 2014, which still only represents an average 7% coverage of the working age population (PenCom). The introduction of a basic a safety net or retirement income as well as further introduction of private pension funds is likely to improve coverage and increase asset growth within the pension industry on the continent.
Annualised growthAssets as a % of GDPAfrican pension assets growing at remarkable paceAnnualised growth rates (local currency) vs. Asset as a % of GDP1 year3 year5 year10 yearAssets as % of GDPWorld (2014)South AfricaNamibiaSwazilandBotswanaZambiaGhanaKenyaTanzaniaUgandaRwandaNigeria0%10%20%30%40%0%25%50%75%100%Source: Regulator annual reports and websites, other industry sources, EAC review of pension sector (Callund Consulting), Towers Watson Global Pension Study 2015, RisCura analysis
Note: Zambia figures exclude NAPSA
Africa has experienced tremendous growth in pension assets over the last five years. In much of sub-Saharan Africa where pension systems are older and more established, growth rates have been lower, ranging between 8% and 18% over the previous five years. Assets in East Africa have grown in excess of 20% on a consistent basis only overshadowed by Nigeria, which has seen growth between 25% and 30%. These trends are set to continue as this young continent moves towards increased coverage, and more inclusive and comprehensive systems.
As African trade agreements are forged and trade blocs established, migration and labour mobility is set to increase, which raises the issue of pension portability. In recognition of this trend, many of the regions now have harmonisation goals, which will allow coordinated legislation and portability of pension benefits. An example of portability can be found in a memorandum of understanding that binds Burundi, DRC and Rwanda that allows portability of pension benefits between the countries. Portability is likely to gain importance as Africa continues to become increasingly connected by infrastructure, regional trading agreements; and as pension coverage reaches more of the working population.