By  | 

As pension fund invests K400 million in government securities

LUSAKA, ZAMBIA – Zambia’s Largest Private Pension Fund, Saturnia Regna Pension Fund (Saturnia), has seen an increase in investment in its diversified portfolio, with the national Treasury being one of the biggest beneficiaries.
According to the company’s annual financial statement for the year ended 2020, the pension fund saw a 27 percent increase in assets during the year, with total assets closing at K3.01 billion, compared with K2.36 billion at the end of 2019. Governments around the world issue Treasury bonds to raise short-term and medium-term finance to fund national expenditure and help manage economic variables.

The scheme has invested over K400 million of those assets – equivalent to 13.7 percent of its portfolio – in local government securities – about one and half times the investment in the previous year. Saturnia Regna Pension Fund Board Secretary Bryson Hamanzuka said that the increased investment in government securities demonstrated not only the fund’s faith in the local economy but also its commitment to playing a key role in Zambia’s development.
“A key element of effective economic transformation is consistent and significant investment in the local economy. One such way to invest in the local economy is through government securities, which pumps resources directly into the national Treasury,” said Mr Hamanzuka. “This has become even more important in the wake of the COVID-19 pandemic, which has had an adverse impact on the Zambian economy. One of the first steps on the road to recovery ought to be replenishing the national coffers by investing in asset classes such as government securities.” On the other hand, government securities offered attractive yields during the year which served to enhance returns to the benefit of the Members of the Pension Fund.

Mr Hamanzuka explained that responsible investing was a core value that had long underpinned the investment philosophy and process of Saturnia’s investment managers and administrators, African Life Financial Services Limited (Aflife) and Benefits Consulting Services Limited (BenCon), respectively. “We see this explanation of the breakdown of the fund’s investment as part of the journey to creating more transparency and visibility to help investors make more informed choices,” he added. Saturnia remains the largest private multi-employer pension fund in Zambia and the most diversified fund with about K3 billion invested in equites listed on the Lusaka Securities Exchange (LuSE), government securities, real estate, corporate bonds, loans, fixed-term deposits and offshore equites. The well diversified portfolio helps to ensure sustainable returns over the long term.

The funds invested on behalf of members help grow returns in order to pay member pensioners and cover the future retirement benefits of contributing members. Last year, the fund paid out K288 million in pensions to retirees. Membership is comprised of 195 corporate entities and 34,527 individual members.  Corporate membership covers every economic sector of the country including agricultural, mining, financial, quasi government, transport, manufacturing, fishing, construction and retail.