PSPF recovers, records E5.395bn net surplus

MBABANE – The Public Service Pensions Fund (PSPF) is said to have reached unprecedented levels of income in the year 2020/21 amounting to E6.985 billion compared to only E355 million the previous year.

This was mainly driven by the unrealised revaluation gains of equities in their external assets that stood at E3.996 billion.

This appreciation is said to have resulted in a net surplus of E5.395 billion compared to the loss of E1.132 billion in the previous year.

This is as per the organisation’s recently-released annual report for the year ended March 31,2021.

The latter is a public organisation that was established in 1993 for the management and administration of pensions for government (public sector) employees.

QUOTES Effect

The scheme is run as a defined benefit pension. With effect from May 1, 2007, the Public Service Pensions Order regulations were amended.

All members contribute at a rate of five per cent of pensionable salary while the participating employers contribute at a rate of 15 per cent

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of pensionable salary.

Board Chairman Sammy Dlamini said the fund performed exceptionally well in the year under review, resulting in a 25 per cent return for the year reflecting a more than E5 billion return in absolute terms and a real rate of return of 21 per cent.

“This exceptional performance resulted in fund assets growing to reach E28 billion (March 2021) from

E22 billion (March 2020),” he said.

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Meanwhile, total expenses for the year are said to have reflected an increase from E1.487 billion (2020) to E1.590 billion (2021).

“It may be noted that starting from last financial year, the total benefits paid out to our retired members has been higher than the total contributions received from active members of the fund.

“The benefits paid out stood at E1.325 billion compared to the actual total contributions by members that amounted to E1.237 billion,” he

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Dlamini further shared that coincidentally, March 31, 2021, also marked a full year of implementation of the PSPF Revised Investment Strategy wherein the external assets of the fund were converted into a specialist equity portfolio.

Rebalancing the external portfolios is said to have ensured aggregation of the investment strategy to ensure resilience while allowing the Eswatini assets to be invested mainly in fixed income instruments, property and private equity in view of the low level of capitalisation of the Eswatini Stock Exchange.

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There was an increase in the Net Asset Value of the fund from E22.2 billion to 27.6 billion.

The main drivers being the outperformance of the listed equities in the foreign portfolio and South African equities which recorded revaluation gains of E4.1 billion as recognised through the revenue account.

This translates to a growth in the Net Asset Value of 25 per cent.

The domestic portfolio equities also grew by E90 million while domestic debt instruments declined by E2.5 million as recognised through the revenue account.

This was as a result of impairment provisions effected at year-end.

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