IoDZ warns pension funds


IoDZ chairperson, Susan Mutangadura

THE absence of proper technical skills among trustees in various pension funds has affected the growth of funds in Zimbabwe, the Institute of Directors (IoDZ) has said.
IoDZ chairperson, Susan Mutangadura said these technical skills should be combined with high levels of corporate governance practices to build a solid pension fund system that is capable of working with advisors, such as fund managers to make the right investment decisions.
Pension funds, insurance companies and mutual funds are among key investors on the financial markets.
The IoDZ said research done by regulator, Insurance and Pensions Commission’s (IPEC), indicated that these skills were lacking in pension funds, with less than half of their trustees untrained.
She said IPEC’s study had indicated that trustees took advice religiously with little questioning or disagreements.
Mutangadura said this was a source of concern to the regulator, IPEC, and the IoDZ.
“Research into pension funds, which are key investors has shown that formal trustees training has been undertaken in less than 50 percent of schemes,” said the IoDZ boss.
“Thirty two percent of schemes’ trustees rarely disagreed with external advisers (auditors, legal advisors and actuaries) (and) 24 percent never disagreed with their advisors…pension funds have lost value. My question is therefore if we improve the governance structures, could we see an improvement in performance? When the market moves, will we be ready?” she asked, adding that
these technical skills are important to manage pension funds.
However, also critical was the practice of good corporate governance in pension funds, institutional investors and insurance companies.
These three are some of the most important investors in Zimbabwe, she told the financial markets indaba held in Harare last week.
The IoDZ chairperson also said good corporate governance was the core of fund management, which aim to create “the best possible outcomes for all stakeholders”.

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