Business Reporter
The Insurance and Pension Commission said total pension funds membership fell by 24 percent during the full year to December 31, 2016 to 262 085 members compared to the prior year figure of 344,198.

In a full year report released by IPEC based on 16 standalone funds, four fund administrators and three life assurers, the Commission said the drop in membership was due to company closures that took place in the economy or retrenchments.

Active members for the period constituted 184 854 compared to 210 000 of the previous year while deferred pensioners rose to 33 percent from 19 percent.

Employers contributed $49 million of total contributions during the year under review while active members paid $33 million of total contributions compared to $52 million of the previous period.

Total contributions inclusive of arrears as at December 2016 were $355 million. The Commission, however, noted that 77 percent of contributions were arrears at $273 million (due to liquidity challenges.

“IPEC continues its engagement efforts with sponsoring employers and fund administrators in an effort to rectify this challenge.

“Payment plans have been approved and some parastatal pension funds may need to convert from Defined Benefit to defined contribution in line with emerging trends,” said IPEC.

For the reporting period under review, standalone self-administered funds reported a 10 percent growth in contributions to close the year 2016 at $355 million.

However $273 million of the contributions were in arrears compared to $235 million of the previous comparative period.Fund Administrators recorded the highest arrears contributions of $272 million for the year under review.

Insurer self-administered funds reported a slight decrease of six percent in contributions to close the year 2016 at $85 million compared to $90 million of the previous year. However, $35 million of the contributions were in arrears.

Collected contributions by all the four administrators remained flat at $186 million from the comparative period last year. Standalone and insurer administrators reported a slight decrease in contributions received.

“IPEC continues to engage sponsoring employers and monitor their funding plans for arrears (defined contribution funds) and any actuarial deficits (defined benefit),” said the Commission.

Furthermore, professional administrators realized an 18 percent growth in contributions to close the reporting period at $98million compared to $83million of the previous year. Contributions arrears were $43million of total contributions.

Total income (contributions inclusive of investment income) was $340million compared to 275million of the previous year.Insurer administered funds recorded the highest income growth of 80 percent for the period followed by fund administrators with 48 percent growth.

The industry reported a 23 percent expense to contribution ratio similar to the comparative period last year while the expense to total income ratio shed 3 percent to close the year 2016 at 13 percent.

Total assets for the industry increased to $2,33 billion as at year end from $2,13 billion reported previously. The asset base was constituted as; standalone funds ($1,39 billion) insurer administrators ($386 million) and fund administrator ($568 million).

IPEC said standalone pension funds invested 45 percent of their investment portfolios in properties, insurer self-administered invested 40 percent of them in equities and fund administrators invested 52 percent of funds’ portfolios in equities.

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