The
GEPF Retirement Benefits Fund net assets are estimated to reach more than
Tsh300 billion in value during the financial year that ended on June 30, 2015.
ACCORDING
to the GEPF Director-General, Daud Msangi, the net assets of the Fund grew from
Tsh265,438.12 million during the year to June 30, 2014 – rising from
Tsh198,384.50 million in the year to June 30, 2013: an increase of 33.77 per
cent!
He
also noted that the growth in net assets was attributed to an increase in
members’ contributions collections, and an increase in investment income –
largely due to prudence in investment placements!
However,
Msangi says, the year 2013/14 marked the birth of GEPF Retirement Benefits Fund
which signifies the introduction of the pension system. Prior to that, GEPF
operated as a Provident Fund catering mainly for contract and other non-pensionable
employees.
Therefore,
GEPF performance during the year under renew remained impressive as the Fund
recorded growth in all aspects.
The
number of members increased to 76,045 in the year 2013/14 which is equivalent
to a 28.80 per cent increase compared with 59,042 in the year 2012/13.
Contributions
from members increased to Tsh52,169.48 million in Year-2013/14, from
Tsh37,299.76 million in Year-2012/13.
The
survey portrays that another notable performance was in respect of investment
income, whereby collections increased to Tsh24.90 billion by June 39, 2014,
from Tsh18.30 billion by June 30, 2013.
Therefore,
the report states, the Fund registered significant growth in terms of the
number of its members, member’s contributions and investment income which
together contributed to 33.77 per cent growth in the assets of the Fund.
In
order to expand the coverage both from the formal and informal sectors, the
Fund is operating two schemes: a mandatory scheme, and voluntary one.
The
survey says that, the Fund performed very well in terms of registration of new
members and collecting member’s contributions from the mandatory scheme.
“The
growth in registration was 28.8 per cent, while for contributions it was 39.90
per cent. Such good performance was a result of intensive marketing which
attracted many members to join the Fund. The increase in public service
salaries also contributed to the noted growth in the contributions collected,” the
report reads in part.
The
Fund continued with implementation of the Voluntary Savings Retirement Scheme
(VSRS) for the fourth year in 2013/14. A series of seminars and other marketing
communications mix were used to sensitize existing members and potential
members. As a result, the number of members joining the voluntary scheme
increased consistently from 2010/11 to 2013/14.
“The
total recruitment during the year under review was 15,204 members – which
brought the total recruitment since inception to 33,003 members. The same trend
was witnessed in respect of contribution collection which reached Tsh3,101.25
million per year during the year 2013/14,” the report says.
A
total of Tsh13,586.29 million was paid as benefits to members who left the Fund
for assorted reasons including retirement and transfer to the Public Service
Pension Fund. The transfers were in respect of members who had graduated to
pension before the Fund converted to a pension scheme.
“There
has been an increase in benefits payments over the period. However, the level
has remained within acceptable ranges.
During the year under review (2013/14), 26.0 per cent of the total
contributions received were paid out as benefits – leaving over 74.0 percent
for investment. This is a good measure of a healthy Fund which guarantees
future payments with guaranteed sources from both income from investments and
contributions collected,” the report enthuses.
The
Fund will continue to ensure members’ contributions surpass benefits paid so as
to maintain a reasonable level of funds to be invested.
“This
will be achieved through continued search for new members –which will
ultimately improve collections – and maintaining good relationship with
employers to ensure prompt payments of members’ contributions and therefore
making available resources for investment,” the report counsels.
The
Fund’s most popular investment portfolio remained within the four categories of
fixed income assets, real estate, equities and collective investment schemes.
Total Investments up to June 2014 were Tsh242,376.80 million which generated
net collected income of Tsh24,899.81 million.
Taking
into account the gain in the share values (on the equity investments), the
total income received was Tsh36,511.93 million. This amount is equivalent to an
average return of 15.06 per cent of the total investments made as at June 2014.
Such a level of return is considered a very good performance. The investment portfolio
grew by 34.99 per cent from June 2013 to June 2014.
The
report elaborates that investments in fixed income assets comprise placements in commercial banks (fixed deposits), Treasury
bills, Treasury bonds, corporate bonds and loans.
During
the year, investments in fixed income amounted to Tsh199,804.16 million
compared to the Tsh154,367.64 million invested the previous year. This amount
is equivalent to 82.44 per cent of the total invested funds, namely: Tsh242,376.80
million. The remaining 17.56 per cent was invested in other areas, including
equity participation and real estate development.
Income
received from fixed income assets was Tsh24,009.44 million – equivalents to
96.10 per cent of the total income collected during the year. The remaining
Tsh970.37 million (equivalents to 3.90 per cent) was received from other
investment categories, including real estate, collective investment schemes and
equities.
The
report states that investment in properties and real estate as at June 30, 2014
stood at Tsh20,970.42 million – indicating an increase of 51.25 per cent from
Tsh13,864.62 million at the end of June 2013. The increase is associated with
the payments made to contractors for construction of GEPF House.
Similarly,
as at end of June 2014, investment in properties constituted 7.90 per cent of
the total assets of the Fund. Other investments made under this category were the
acquisition of 50 acres of land at Kijaka-Kimbiji (Kigamboni in Dar es Salaam),
and 40.54 acres at Njedengwa in Dodoma.
The
two were purchased for the purpose of constructing low-cost houses for sale to
members and the public at large. The idea is to sell such houses to members
through cash or mortgage financing – depending upon the choice of members.
Equity
investment involves holding subscription to shares in public companies listed
with the Dar es Salaam Stock Exchange (DSE).
As
at June 30, 2014 the market value of investments in equity stood at
Tsh20,848.41 million – up from Tsh10,308.45 million the yer before!
This
signifies an increase of 102.25 per cent compared to the previous year – and is
attributed to appreciation of shares value at the Market.
The
capital gain realized is Tsh15,550.89 million, compared with the cost of
buying!
The
Fund continued to aim at high-paying and less-risky areas – and, as a result,
it achieved the noted growth. All investments made during the year were within
the limit provided by the Social Security Regulatory Authority (SSRA).
Under
the new GEPF Act, members are paid a monthly pension on their retirement. However,
members under the Voluntary Scheme are credited with interest since the scheme
is a savings one – and, therefore, most of the members do not qualify for a
pension!
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