|MIPF boss faces the axe|
|Friday, 08 June 2012 12:00|
Martin Kadzere and Bright Madera
An investigation conducted by the Insurance and Pension Commission between March and May this year was meant to assess the fund’s corporate governance structures.
It also looked into compliance of rules and regulations that govern the fund and adequacy on internal control systems.
IPEC is the regulator of pension funds and the insurance industry.
An eight-member board led by Mr Maposa is responsible for administering the fund’s operations.
He could not as he was out of the country. He said he returned on May 30 and there had not been enough time for the board to consider the report.
“Therefore, it would only be proper for me to present to IPEC the collective position of the board. Surely, you do realise that the issues raised in your report are not so simple as to be discussed or resolved between the board chairman, the principal and your office.
“In this instance, I am requesting for time to consult my board and a written response will be provided within the next 14 days.”
The fund was also not making investments in the absence of the board members’ approval, the report said.
The report also alleges that Mr Maposa had “overbearing” influence in the operation of the board, which may have compromised its independence.
It was noted that there was no documentary evidence to indicate that the majority of the members, as required by the regulations, sanctioned the forensic audit.
“The sanctioning of the forensic audit solely by the chairman amounts to the same individual reviewing the decisions made by the board through the investment committee which points to him wielding excessive influence,” the report said.
In addition, it was found that the SMC (Private) Ltd, an organisation that Mr Maposa represents, had never remitted contributions to the fund since the adoption of multi-currency regime.
This was in violation of rule 6 (1) of the fund which stipulates that the board representing employees shall consist of people who shall be employees of a contributing employer. Failure by SMC to remit contributions could have made it difficult for the fund to put in place measures such as litigation to force other mining houses to pay since this was going to amount to the MIPF “policing its boss”.
On remuneration of the board members, the report alleges that, in addition to the sitting fees, members are entitled to monthly fuel allowances and quarterly fees. The board members are entitled to monthly fuel allowances, ranging between 80 litres to 100 litres.
“Such compensation structures are in violation of rule 6 (6) of the fund which stipulates that the trustees shall not receive any remuneration for their services. But they may be funded the reasonable out-of-pocket expenses incurred in the exercise of their duties on behalf of the fund,” said the IPEC report.
The commission also noted that the fund portfolio mix was not in line with the fund’s strategic asset allocation policy.
The breakdown on the investments shows that the fund’s investment of 0,86 percent in prescribed assets was not compliant with the minimum regulatory requirement of 10 percent for pension funds.
The fund’s allocation in fixed properties was 69,5 percent of the total portfolio, way above the maximum 40 percent stipulated in the investment policy statements.