Monday, September 21, 2020

Bank of Botswana joins pension fund controversy

The Bank of Botswana has joined the deteriorating Public Officers Pension Fund fray.
The Sunday Standard can confirm that the Governor of the Central Bank, Linah Mohohlo, has submitted a detailed report to the Minister of Finance, Baledzi Gaolathe, advising government on how best to manage the close to P30 billion Pula pension fund.

There is growing concern inside government that the fund’s potential to help diversify the economy is not utilized as over 70 percent is currently invested offshore.

The Fund is estimated to be paying close to P100 million in fees to a litany of asset investors who have suddenly descended onto Botswana as a result of the Fund’s growth.
There are also concerns on the ethics of some of the managers, as some act as both consultants and administrators to the fund.

Alexander Forbes is one such company.

Government is said to be concerned that even though the company offers distinct services of consulting and fund administration, it has directors that sit on both arms.

Mohohlo is tapping from her experience and the expertise of her staff at the Bank of Botswana who are the principal guardian of the country’s reserves invested abroad.
In its report, the Central Bank dissects and outlines in detail the weaknesses in the current regime of managing the pension fund, coming to the conclusion that technical expertise and capacity is the biggest handicap.

Lately, there have been concerns at the poor grasp of technical matters of the Fund among the Board of Trustees.

Mohohlo’s report follows closely on the heels of an enquiry commissioned by the Registrar of Pensions, Wilfred Mandlebe, to investigate the pension.

Mohohlo’s report also signals how seriously the government is concerned by the turn of events at the Public Officers Pension Fund.

The situation, however, is not helped by whispers that some cabinet ministers are shareholders in some of the companies managing portions of the Fund.

It could also be a sign that government is in possession of incriminating evidence against those tasked with the governance of the Fund.

Earlier on, the Permanent Secretary to the President, Eric Molale, had indicated to the Chairman of the Board of Trustees, Nelson Mokgethi that he had decided to engage Novare Actuaries and Consultants to audit the Fund.

Molale was rebuffed by the Trustees who plainly told him he did not have the powers.

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