Have interest in your fund-head.
This was said by BPOPF chief executive officer, Ms Boitumelo Molefe on May 25 in Francistown at a meeting to interact with and update members on the progress of the fund.
She informed members that unlike other countries, where the risk of investment was absorbed by government, Botswana uses a model called defined contribution, where the risk of fund investments was absorbed by members.
'You must therefore hold us and the board of trustees accountable, ask questions and seek answers every time you see us on the news for the wrong reasons,' said the BPOPF head.
As members, she said they should not be discouraged upon reading about their fund in the press, as it was run aptly.
The press, Ms Molefe said, was also an important stakeholder, which kept them on their toes.
She explained that the fund was huge and was of public interest, therefore it would always have the press hovering over its head searching for news.
Ms Molefe noted with concern that BPOPF, just like other institutions, was affected by the blacklisting of Botswana for money laundering and financing of terrorism, which is feared to have the potential to discourage or slow down inflows of foreign direct investment to the country.
'It has affected us because we are not complacent with offshore investment regulations,' she said, adding that their offshore custodians terminated their collaboration with them.
She explained that the BPOPF was allowed to invest 70 per cent of its fund offshore as the local market was too limited to consume the P66.08 billion the fund had.
Ms Molefe was nonetheless optimistic that by September Botswana would be removed from the blacklist, lamenting that should the situation continue, the fund would experience glitches.
She also told members about changes brought about by the Retirement Fund Act of 2014, which effected in 2016 as it prohibited pension funds from doing their administration in-house.
She said the fund was working with Non-Bank Financial Institutions Regulatory Authority (NBFIRA) towards outsourcing its administration, which would lead to members having to work with different companies regarding their pensions.
Ms Molefe said the change was big as members' contribution would be directed to outsourced companies, while pensioners would also receive their monthly payments from those administrators.
The other regulatory change, she said was that NBFIRA had started to regulate how BPOPF invested money, as it had set limits for the fund's investment in different investment products.
'For example, we have certain amounts of limit when we invest in equity markets, offshore markets or in government bonds,' she said.
This, Ms Molefe said, was meant to manage the risks of investments and circumvent putting all their eggs in one basket.
She said the other positive development brought about by the act was that the fund was allowed to invest in alternative investments.
In the past 20 years, Ms Molefe said, institutional investors invested in listed bonds and shares, but today there were alternative markets, which included private equity, infrastructure and property.
'As BPOPF we find it necessary to invest in alternative markets because the returns are better,' she quipped.
Ms Molefe told members that BPOPF had changed the way it invested funds, as in the past, they used local asset managers to assist them in offshore investments, a model she said was costly.
She also warned members that their investments were exposed to market shocks locally and offshore, therefore the returns were likely to fluctuate.
However , she said they should expect growth in the long term.
She gave the Choppies issue as an example where BPOPF lost market value, as it owns 27 per cent of Choppies, which failed to publish its financials.
Ms Molefe however, assured members that the fund was growing, adding, 'even the returns that we give you beat inflation'.
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|Publication:||Botswana Daily News (Gaborone, Botswana)|
|Date:||May 27, 2019|
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