Why has government failed to honour its pension claims? Is it just the Patriotic Front government or this emanated from the MMD government? This is a Zambia economic crisis issue and has little to do with the Patriotic Front, as a party.
Frustrated pensioners, are calling for regime change, hoping that a UPND led new government would prioritise their fate. But can Mr. Hichilema truly address this issue as Head of State when his private firm, Saturnia Regna Pensions Fund has swindled Zambians of over K2bn?
Munakupya Hantuba and several other prominent businessmen, including the vocal Mr. Hakainde Hichilema have been named in a controversial shareholding structure of Africa Life Financial Services, Menel Management Services and Benefits Consulting Services Ltd, companies which are behind the management of the private pension Fund.
The Board of Trustees has been calling for an Annual General Meeting in an attempt to change the Fund managers, and yet Mr. Hichilema, the champion of pension reforms, has not been seen to be in the forefront securing the fate of the poor pensioners in his private firm but wishes to assure a thousand civil servants that he will prioritise their fate as Head of State.
Let us address the real pension issues by acknowledging the fact that what Zambia needs is to address economic issues that have led to the Central Bank depleting the country’s Foreign Currency reserves. How can you pay pensioners if you can’t manage poverty reduction priorities?
Ensuring sufficient resources for retirement today encompasses a complex set of decisions involving assumptions on asset returns, interest rates, inflation rates, longevity and future salary growth. And this is what Cabinet has focused on.
With inflation potentially residing on some perpetual increase, pension funds should increasingly be looking to invest in real assets like infrastructure and real estate to hedge against the threat of rising prices. This negative backdrop is being played out against an environment where the corporate governance responsibilities of institutional investors and pension funds is being questioned and challenged.
This comprehensive Pension Fund Strategies discussion should address many of the current pension issues from the asset and liability perspectives to give an ordinary Zambian a holistic appreciation of the complex issues involved, without being political.
We may not agree with President Edgar Lungu on many issues, but his pronouncements on the pension regime has helped us understand the complex world of Pension Investment Strategy across a number of areas including:
• Understanding the global pensions crisis beyond Zambia.
• The role and purpose of pension funds. And,
• Benchmark timing and tactical asset allocation which has eluded us for years.
What Zambia needs, is a new governance system that must prioritise development over political hegemony. We have spent too much time politicking at the expense of development. Mr. Hichilema cannot solve the current impasse, he is just politicking. Let’s objectively face this issue as Zambians.
©Zambia Reports 2019.