GEPF Net asset base recorded spectacular growth: report.

Front view of GEPF House located along Ali Hassan Mwinyi Road as ones of the Fund's real estates

Christian Gaya, Business Times February 24, 2017 -March 2, 2017

The GEPF retirement benefit Fund recorded spectacular growth in its net asset base for five consecutive years.

"For the year ending June 2015, the net assets increased from TZS...

265,438.12 million to TZS 342,134.82 million, representing an increase of 28.89%.The growth in net asset is attributed to increase in the contributions collected from members and investment income received from investments", report explains.

For the past five years, the Fund has been growing steadily in members’ recruitment and members’ contribution collection.  Cumulatively Members under Mandatory Scheme have increased from 35,324 in June 2014 to 44,793 in June 2015.

Registration of Members and Contributions Collection under Voluntary Scheme. The Fund registered sound growth in members’ registration and contribution collection under Voluntary Scheme (VSRS). During the year the Fund registered a total of 13,361 14 new members

This number makes total registration under the scheme since its inception in 2010 to increase from 6,555 in June 2011 to 46,364 members in June 2015. Likewise its contribution during the year was TZS 5,084.00 million. Contributions under VSRS have been growing annually from TZS 309.00 collected in year 2010/11. Cummulatively since its inaugration in 2010 a total of TZS 11,455.06 million has been collected under the scheme.

Taking into account both schemes (Mandatory and Voluntary) membership grew to 91,157 in June 2015 from 76,045 members who were registered as at June 2014. Likewise, contributions increased from TZS 52,169.48 million in June 2014 to TZS 53,930.18 million in June 2015

While benefit payment during the year slightly decreased from TZS 13,586.29 million paid during the 2013/14 to TZS 12,226.08 million during 2014/15. The slight decrease is due to conversion from Provident to Pension system which resulted to decrease in members withdrawing from the Fund to join Pension Funds

According to the report the Fund investment portfolio grew to TZS 307,821.03 million to June 2015 from TZS 237,443.28 million registered at June 2014. The growth achieved was 36.02% when compared to the previous year. The investments were made in fixed income securities, real estates and equities

The report portrays that during the year 2014/15 investments in fixed income securities amounted to TZS 250,158.65 million compared to TZS 199,804.16 million which was available as at June 2014. The amount invested in fixed income securities was 81.27% of the total investments. Investment in Fixed Income Assets comprise of placements in Government securities (treasury bills and treasury bonds), commercial banks (fixed deposits), corporate bonds and loans.

Furthermore report indicates that investment in properties and real estate as at 30th June 2015 stood at TZS 25,789.01 million indicating an increase of 22.98% from TZS 20,970.42 million at the end of June 2014.

During the year under review, the Fund purchased plots for future developments in Mwanza and Mbeya. The plot acquired in Mwanza has a total area of 8,191 SQM and the one in Mbeya has an area of 48,588 SQM.

"The Mwanza plot is planned for construction of a conference facility while Mbeya plot is planned for construction of shopping mall or students’ hostel depending on the outcome of the feasibility study to be carried out during 2015/16. Further the Fund plans to acquire land in Mtwara for construction of commercial office building" the report states.

According to the investment in equities and collective investment scheme portfolio the report shows that the Fund holds shares in public companies listed at Dar-Es-salaam Stock Exchange (DSE). As at 30th June 2015 investment in equities stood at TZS 23,251.16 million compared to TZS 20,848.41 million held at June 2014. The increase in value of shares held is attributed to appreciation of share values at the Market. During the year the Fund  disposed 400,000 TBL shares for the purpose of realising capital gain.

"The Fund also invested a total of TZS 500.00 million in collective investments scheme through purchase of Jikimu Units under Jikimu Fund operated by the Unit Trust of Tanzania (UTT). The decision to invest in Jikimu Fund is to diversify the Funds investment portfolio and maximise returns from investments. At the close of the year the Fund had Jikimu Units with a market value of TZS 1,740.61 million" report reveal

The Fund disbursed shillings 4,818.82 million to Watumishi Housing Company (WHC-REIT) which is a company owned jointly with other social security Funds and National Housing Corporation. WHC-REIT was established for the purpose of constructing houses to be sold to public servants with phase one planned to start with 2,500 houses. As at 30th June 2015 the Fund had invested a total of TZS 4,819.83 million to WHC-REIT

According to the report the Fund collected income from investments amounting to TZS 34,846.80 million which is 39.44% increase when compared to TZS 24,991.24 collected during the previous year. Most of the income was received from fixed income securities which accounted for 77% of the total income followed by equities which accounted for 21% of the total income.

During the same under review the Fund disposed 400,000 TBL shares to take advantage of the high price that prevailed in the market. The sale of these shares brought to the Fund total proceeds of TZS 7,222.27 million from the cost of only TZS 728.0 million. This amount brought to the Fund a capital gain of TZS 6,494.27 million.

"The increase in income from investments is a results of prudence in investment placement as the Fund continued to aim at high paying investments with less risk. All investments made during the year were within the limit provided by the Regulatory Authority" part of the report reveals.