Thursday, February 9, 2023

BPOPF weathers financial turbulence

Despite fears of it being shredded into the deep abyss of corruption, the Botswana Public Officers Pension Fund (BPOPF) has something for members to smile about.

The BPOPF) has posted a slight growth in the Fund’s Assets under management of 1 percent in the asset base from P 66.52 billion to P 67.17 billion.

The Fund’s board of trustees declared a 4 percent final rate for the Pre-retirement switch portfolio and the pre-retirement switch for members nearing retirement. 

BPOPF Board Chairman Solomon Mantswe, told the media that it is a portfolio the Trustees created to preserve capital for the members adding that the rationale behind it is that market shocks like the one they are experiencing must always be anticipated and the members nearing retirement should thus be protected from such. 

“We encourage members nearing retirement to seriously consider this portfolio going forward. We however must hasten to discourage members with a longer term to retirement from reactive decision making, as the Fund has in place portfolios and strategies suitable to them,” said Manstwe.

He is of the view that the markets will eventually rebound as they have always done adding that what they however do not possess is a crystal ball to predict when that would happen.

Mantswe stated that a -1percent final rate for the active member portfolio, adding that ideally a positive rate is what their members would have expected. He however stated that they derive comfort from the fact that while the performance rate is a negative one percent, they did not have the deepest drawdown on member credit that occurred in this market. He stated that they certainly would have preferred a higher return for the members, and that however as a Fund it is critical that we retain some funds in reserves.

“The impact of this will be felt by member who retired on the 31st of March 2020. Members retiring post 31st March 2020 will have a positive growth on the portfolio,” he said.

He further stated that 0 percent final rate for the with profit pensioner portfolio and added that the commitment they have made in relation to the pensioner portfolio is a return that is not below zero. He said their aim is to always pay 80 percent of inflation and that however, the substantial erosion on performance during the last month of the financial year warrants that they maintain the 2019 rates for 2020. 

BPOPF Chairman for risk management committee Rutang Moses stated that the COVID 19 pandemic has not only threatened the performance of their investments, and that the restrictions in place have somewhat impacted on the operations of the Fund. She said for the BPOPF, being a global investor and a social security service provide this risk escalated to being their top strategic risk.

“We have to ensure that our strategies are sufficiently agile to contend with any eventualities and that the Fund remains a going concern for many years to come,” said Moses.

She further stated that one of the challenges the Fund is faced with now and going forward is disseminating critical information to the members and stakeholders as the impact of the multiple risks unfold. She said it is not in their members’ best interests for them to make hasty and uninformed decisions based on perceived and unexplained risks.

“The Fund has a robust risk management framework and a Business Continuity Plan to ensure that all risks are mitigated and or managed accordingly, and that service provision is not disrupted,” she stated. 


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