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BPOPF boss opens up

SHARE   |   Monday, 14 December 2015   |   By Othusitse Tlhobogang
BPOPF boss opens up

Having previously managed smaller entities – Debswana Pension Fund worth approximately P3 billion and later being Chief Financial Officer at Bokamoso Private Hospital – Molefe is excited about the mammoth task before her. With a bubbly smile she declares that the transition "is a giant leap, a huge challenge but I am settling in really well". DITIRO MOTLHABANE reports

Incoming Chief Executive Officer of Botswana Public Officers Pension Fund (BPOPF), Boitumelo Molefe has been a busy lady this past week on a charm offensive to advance her credentials as a lady worthy of her big job at the country richest body. Under her command and management is over P45.6 billion of the country’s pensioners’ money. On Thursday she addressed an Afena press club session and once more adorned the stage on Friday to announce her company’s financial results. She oozes confidence of a person who knows very well the challenges at hand and the way to go about them. She has hit the ground running by implementing a restructuring plan that has already claimed some victims.

Although she said she is constrained by contractual obligations and the ongoing finalisation of the new structure to reveal who has been retrenched as their positions became redundant, The Patriot on Sunday can confirm that former acting CEO Lesedi Moakofhi is among those that have been laid off. Recruitment is underway to fill the 45 per cent vacancy gap for posts created by the new structure. The restructuring of the fund is coupled with a new five-year HR strategy and insourcing of administration services and the establishment of a transactional back office otherwise known as an investment management office. Molefe is quick to admit that such transformation brings challenges, which they are addressing effectively.

She said one of their priority areas is data cleansing to ensure that the information in their database is accurate, after they discovered mistakes when they inherited it from Alexander Forbes. "Since we are doing this (insourcing of services) for the first time we need to develop capacity by recruiting, training and retaining highly skilled personnel," she said, adding that they are working closely with the regulator- the Non-Bank Financial institutions Regulatory Authority (NBFIRA) - to ensure compliance and avoid conflict which occurred in the past. Having previously managed smaller entities - Debswana Pension Fund worth approximately P3 billion and later being Chief Financial Officer at Bokamoso Private Hospital - Molefe is excited about the mammoth task before her. With a bubbly smile she declares that the transition "is a giant leap, a huge challenge but I am settling in really well".

She enjoys support from different quarters as revealed in separate conversations with some employees and trustees from both the employer and the employee (trade union) side. To attest to this, one of the Trustees waltzes into the hotel where the interview is taking place, and they instantly embrace in hugs like long lost friends chatting at the top of their voices. Even colleagues in the financial services sector have also given her appointment a thumbs-up and are confident she will deliver. Venture Partners Botswana MD Anthony Siwawa said in a previous conversation that Molefe is qualified and a suitable appointment to take the fund forward. For now, Molefe says the turbulence and uncertainty in the market is the only thing that gives her "sleepless nights". She said she wishes there was a way to control the market to have predictability.

BPOPF financially sound

Actuaries from Deloitte have declared the Fund to be "financially sound" in the financial results for the year ending March 2015, snippets of which Molefe shared on Friday. As at 31 March 2015 BPOPF had P45.626 billion assets under management up from P39.246 billion in March 2014. Active and Deferred pensions assets increased from P38.22 billion in 2014 to P45.140 billion by 31 March 2015. The Deloitte financial report shows that overall returns were lower for the period ending 31 March 2015 (13.73%) compared to March 2014 (14.19%), as new asset managers produced very volatile returns for the period. 

Current liabilities of BPOPF decreased from P870.728 million at 31 March 2014 to just P242.573 million as at 31 March 2015. The actuaries encouraged that to maintain the streak the fund should encourage prompt collection of amounts due (accounts receivable) from contributing employers and prompt payment of benefits (benefits payable) subject to governance procedures. The net fund surplus stood at P6 774.520 (2015) up from P4 287.134 (2014). The main reserve account increased from P411.735 million in 2014 to P1 009.448 million in the same reporting period.

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With the financial position of the fund assured actuaries then recommended the under allocation of assets to the with-profit pensioner portfolio amounting to P70.547 million and the under allocation of assets to the non-profit pensioner portfolio amounting to P174.777 million should be allocated to the pensioner portfolios. For 2015 BPOPF has declared 17 per cent bonus (12.25% in 2014) interest for Active and Deferred Pensioners, and 3.25 per cent (3.55 in 2014) for with-profit pensioners.

Contribution to the economy
Former Assistant Minister of Finance, hotelier David Magang observes in his book Delusions of Grandeur; Paradoxies and Ambivalences in Botswana's Macroeconomic Firmament "if pension funds in the western world are earmarked as veritable props to the flagging economies and are even voluntarily banding together to engage in massive and broad based infrastructural investments, I do not see any reason why our own pension fund managers cannot step up to the dais and help revolutionise our now spasmodic". Molefe is aware of the accusation leveled against BPOPF - the third largest pension fund in sub-Saharan Africa after South Africa and Nigeria - that they have not done enough to augment efforts at economic diversification, infrastructure development and employment creation locally. Put to her that BPOPF may be exporting jobs and profits by investing a large proportion of their assets offshore, Molefe said: "We have repatriated over P30 billion from offshore investment.

We have a responsibility to develop our economy and this is achievable with the right objectives. Hence, we have set up two private equity Funds to support the growth of the Small Medium Enterprises in Botswana and an Infrastructure Fund." But the local market may not be ready. Issues of liquidity arise when Molefe is asked if BPOPF's dominance in the Botswana Stock Exchange (BSE) would not crowd out competition and cause liquidity problems. She said BPOPF is desperately yearning for liquidity, confidently declaring that "money is there" but liquidity problems in the stock market, and other regulatory issues where NBFIRA sets a cap on the ceiling for different types of investments hinders them. Molefe says it is not true that BPOPF is stinking rich while pensioners are wallowing in poverty, saying such is a misconception.

The proposed Pensions Act
Long before Parliament approves the new Pensions Act, which will bring changes BPOPF is already aligning their new strategy to comply. But it may be early days. Unbeknown to BPOPF, the trade union party (employee trustees) has already filed a lawsuit challenging the Act, arguing that as major stakeholders they were never consulted. They complain that reducing the size of the board, as proposed, is tantamount to disenfranchising some members as all the 18 trustees represent their constituents. Further, they argue that the new Act is "too Westernised" and disregards the social life of the locals, citing a provision where the definition of a beneficiary is too broad and all encompassing, thus open to abuse. The current Act clearly stipulates who qualifies as a beneficiary, they said.

Molefe is shocked to learn about this development when confronted about it. Evidently taken aback, and surprise written all over her face, she ponders the revelation before she hazards a response. First she explains that management was consulted sufficiently, before wondering why the trustees were left out. "Perhaps we could have taken the initiative to bring it to them. But the Act will bring a lot of good. I do not believe there should be a problem with the representation in the board of trustees as trade unions are quite capable of organising themselves. You should see how they fit in other forums e.g. the Bargaining Council," she opines, still in deep thought over the suggestion that the definition of a beneficiary needs to be refined.