Zimpapers Logo

Business Reporter
Mining firms have accumulated pension arrears of up to $43 million since 2009 as the prevailing liquidity challenges are affecting companies’ ability to remit employee contributions.
As a result, the growth of the Mining Industry Pension Fund has been subdued.
The Chamber of Mines has since written to the defaulters imploring them to honour their obligations and also advised that the MIPF would follow through with legal action. Debtor mines were also advised that the fund would inform the Insurance and Pensions Commission, in its capacity as regulator, as required by the law.

Last year alone, $16 million could not be collected as some miners which previously remitted funds struggled to pay, Mining Industry Pension Fund said in its 2013 annual report.

“Apart from this, debtors negatively affected investments because the funds available for investment diminished.” The MIPF said it has applied various strategies to ensure that the contributions were remitted. In addition, to follow up through mines visits, writing letters of demand and engaging senior executives, the fund also sought assistance from the Chamber of Mines, a body that represents miners.

Zimbabwe’s mining companies remain under pressure from electricity shortages, high labour costs and fluctuations in commodity prices and this has kept on squeezing their cash flows. As such, the mining sector is expected to record a 6 percent growth, according to Chamber of Mines against 11 percent previously projected.

Last year, 1 300 retrenched members went on pension but the number of pensioners increased by 15 percent from 7 516 in December 2012 to 8 639 by December 2013.

“Active members increased by 2 percent from 29 236 to 29 770 mainly because 13 new mines with a total of 1 013 members were recruited during the year,” said the MIPF.

In 2013, the fund recorded a surplus of $6,84 million while the accumulated fund increased by 8 percent from $85,18 million to $92,02 million as at 31 December 2013.

Total annual income increased by 7 percent from $38,8 million in 2012 to $41,46 million in 2013 of which 75 percent was pension contributions income, 11 percent was net fixed property rental income, 6 percent investment income and 8 percent other income.

Cumulative income was driven by contributions at $31,1 million (excluding $149 034 unallocated contributions), due to some salary adjustments in the mining sector.

Total expenses for the year increased by 22 percent from $28,37 million in 2012 to $34,61 million. About 38 percent of this amount was paid out to pensioners. During the period under review, the market value of the fund’s total investment portfolio was estimated at $179,74 million compared to about $158, 56 million in 2012.

At a market value of $55,87 million, the listed equities portfolio increased by approximately 54 percent from $36,32 million as at 31 December 2012 as the fund sought to strategically rebalance its portfolio by investing more in equities. This constituted 31,04 percent of the total investments portfolio. An annual return of 30,15 percent was achieved. For the year, $890,196 was received in dividends down from $$990,000 in 2012. This represented a dividend yield of 2,45 percent.

Money market investments closed the year at $5,56 million, down from $10 million in 2012 as money market maturities were applied towards listed equities purchases.

This was because contributions receipts were lower than expected. Money market investments constituted 3,1 percent of the total portfolio. A total of $970 224 was received in interest, representing an average annual return of nine percent.

Investments in prescribed assets increased from $4,1 million as at 31 December 2012 to $6,8 million as at 31 December 2013. The Fund continued to seek to comply with regulatory requirements.