By: Nghiinomenwa Erastus
The Government Institution Pension Funds has contracted more than 50 asset managers in the listed, unlisted and alternative space to manage its N$136,2 billion asset base.
The Fund annual report for the 2020/21 financial year ended in April shows.
With the assist of these groups of asset growers and managers, the Fund asset base value jumped from N$109,3 billion in March 2020 to N$136,2 billion by March 2021.
More than 30 of the asset managers are mandated to invest in alternative assets, which 13 of them are contracted to invest in the unlisted space. The Fund
As a result, the fund has paid N$38, 6 million as a reward (management fees) to the asset managers by the end of March 2021.
This is a 50% decline from what the fund has paid to the investment managers (N$68,6) by March 2020.
The fund paid N$5,2 billion in benefits: monthly pensions, lump sump on retirements, death benefits, and funeral benefits.
However, the payout was more than the contribution received by March 2021. The fund received N$4,5 billion from employees (N$1,4 billion), employers (N$3,1 billion), and the rest from contribution refunds, representing a shortfall in the contribution of N$697, 8 million.
The benefits payments made by the end of March 2021 included withdrawal benefits-cash out of any accumulated funds upon leaving an employer, valued at N$631 million, a reduction from N$869, 9 million prior financial year.
In terms of income, the fund has earned N$2, 6 billion in interest and dividends valued at N$1,3 billion, representing the growth in assets allocated to various managers beyond the growth in asset value.
The growth in income from investment emanated primarily from interest received as opposed to dividends.
The dividends were reduced by more than half a billion dollars (N$604,1 million) from what was earned by the end of March 2020.
In realizing the interest, dividends, and other income received on behalf of the employees, the fund has incurred expenses of N$880,9 million by the end of March 2021.
This significantly increased from N$321,4 million experienced in the previous financial year.
Another observation from the Fund financials is that the current liabilities that are short-term obligations to the annuitants and others are beyond its current assets.
Current assets are the type that can be liquidated (converted into cash) in a short time to pay obligations.
Current liabilities, benefits payable, accounts payable, and bank rejection was valued at N$709,9 million compared to existing assets of N$607 million by the end of March 2021.
WHERE IS THE MONEY?
According to the financials, by the end of March 2021, N$46,3 billion was invested in the local economy, with a big chunk of N$29,6 billion in (bonds, bills, and securities), followed by equities (shares) with N$18,1 billion in investment.
Secondly, the fund invested N$48,4 billion beyond Namibia and outside the common monetary area.
Thirdly, the Fund assets were invested around the common monetary area with N$24,7 billion invested mainly in South Africa through the JSE.
The fund has been exposed to the listed equities (shares) more than any other asset, locally, in the monetary area, or foreign.
Notably is that N$20 billion of the Fund assets are invested in the South African listed companies, N$13,7 in dual-listed companies (NSX and JSE). Then, N$4,4 billion is invested in Namibian primary listed companies.
On listed foreign shares, GIPF has invested N$13,6 billion by the end of March 2021.
By March, the fund had invested in almost every listed debt instrument (bond), corporate or government on the Namibian Stock Exchange, with N$29,6 billion.
GIPF has also given some assets to unit trusts and other collective investment managers worth N$24,8 billion.
Furthermore, it has allocated N$14,8 billion to asset managers to invest in private equities.
In terms of the unlisted space, the fund has only invested N$55,8 million by March 2021.