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Contribution arrears of self-administered funds increased 28 percent to $299,45 million for the quarter to June from $233,14 million. According to the Insurance and Pensions Commission’s Self-Administered Funds report for the half-year to June, funds realised contributions amounting to $403 million yet $299 million or 74 percent were in arrears as sponsoring employers continue to face liquidity challenges. The report covers 14 stand-alone funds, four fund administrators, and three life assurers. According to IPEC, the high expense ratio remained a major challenge. The average expense to contribution ratio was 32 percent.

“In a bid to protect member interest; individual players have been summoned to justify their cost structures. The industry highlighted that the high expense ratios were gross of investment losses rather than pure administration expenditure.”

The total asset base for the self-administered funds remained in the region of $2 billion from the last reporting period. Prescribed assets uptake rate grew to 3 percent partly due to supply side improvements in approved instruments. “In line with Ministry Of Finance and Economic Development’s directive, players are required to continue to up their prescribed assets to prescribed regulations by the end of December this year.”

Membership for stand-alone funds was composed of 208 000 actives or 56 percent (June 2014: 184 000 or 62 percent), 124 000 or 33 percent — deferred members (June 2014: 68 000 or 23 percent), 22 000 or 6 percent being pensioners (June 2014: 21 000 or 7 percent) and 20 000 or 5 percent beneficiaries (June 2014: 22 000 or 7 percent). Exits declined by 9 percent from 3 000 to 2 900. Total fund membership increased to 371 000 from 295 000 reported in the same period last year.

“This increase could be attributed to the submission of returns by most of the funds during the period under review.”

At the end of the half-year stand-alone funds invested $601 million or 47 percent in properties (June 2014: $578 million or 48 percent), $150 million or 12 percent in capital market securities (June 2014: $171 million or 14 percentage), $34 million or 3 percent in money market investments(June 2014: $54 million or 4 percent), $451 million or 36 percent in other securities (June 2014: $386 million or 32 percent) while prescribed assets increased from 1 percent in the same period last year to 3 percent.

“As a prudential measure, pension funds are required to match their investment portfolios to their liability make-up of their funds and abide to sound actuarial recommendations as advised from time to time.”

Total fund membership for insurer administered funds fell from 29 000 as at June 2014 to 28 000 in June 2015. Active members numbered 27 000 or 93 percent (June 2014: 27 000or 92 percent) while pensioners remained flat at 2 000 or 6 percent (June 2014: 2 000 or 6 percent) and the balance was mainly made up of widows and other dependants. Old Mutual has most of the funds at 32. The others are First Mutual (5) and Zimnat (2).

As at the reporting date, total contributions collected by insurers were $65 million (June 2013: $57 million). Member employees paid $9 million or 14 percent (June 2014: $9 million or 15 percent) with employers contributing $16million or 25 percent (June 2014: $17million or 29 percent).

Liquidity pressure continued to manifest itself via contribution arrears which grew from $32 million or 54 percent to close the reporting period at $40 million or 61 percent of receivable contributions. “The commission continues to nurse the situation with a view to ensure arrears are funded fully by defaulting employers.”

In the period, insurer administered funds invested $73 million or 22 percent in properties (June 2014: $57million or 19 percent), $144 million or 44 percent in capital market securities (June 2014: $151 million or 51 percent), money market securities -$59 million or 18 percent (June 2014 -$43 million or 15 percent), $43 million or 13 percent in other securities (June 2014: $40 million or 14 percent) and prescribed assets grew to 3 percent from 1 percent in the previous period.

Fund administrators membership fell from 80 000 to 79 000, a reduction of 1 percent from the previous reporting period. Active members numbered 51 000 or 65 percent (June 2014:52 000 or 66 percent), pensioner population remained flat at -7 000 or 9 percent (June 2014: 7 000 or 9 percent), deferred members -17 000 or 21 percent (June 2014: 16 000 or 20 percent) and the balance were beneficiaries. — Wires.