05 Dec 2022

Segmenting the Pension Fund will not necessarily minimize the risk exposure, it will most likely increase the risk as it has the effect of taking away from the leverage of scale, the assistant Minister for State President Mr Dumezweni Mthimkhulu has said.

In response to a parliamentary question, Mr Mthimkhulu said segmenting the Pension Fund would immediately result in an upsurge of the cost of administration and limit the pension fund from accessing quality asset managers and other critical service providers.

The management of risk, is conducted through diversification and government has through the regulatory framework put in place various instruments that ensure prudent management and mitigation of risks such as that no single shock can collapse the system, he said.

Such instruments, he said included the Prudent Fund Rule 2 which prescribes how pension fund should be invest.

The assistant minister said as at September 30, the BPOPF’s assets under management were P86.4 billion of which 40 per cent was invested locally and 60 per cent offshore.

He further assured that the BPOPF was fully funded with its assets exceeding its liabilities and in a position to honour its obligations to the members.

Member of Parliament for Molepolole North Mr Oabile Regoeng had asked the Minsiter whether it was not prudent to segment the country’s largest pension fund, Botswana Public Officers Pensions Fund (BPOPF) into various categories to spread the risk and minimise the impact of any possible eventualities

He also wanted to know the BPOPF’s total assets and how much was invested locally. BOPA