HARARE — The Mining Industry Pension Fund (MIPF) says its surplus funds dropped to $7 million last year, from $10,4 million in the prior year after bad debts rose sharply, the mines chamber said in its latest report.
The MIPF was set up in 1952 through a Statutory Instrument for the benefit of employees in the mining industry.
The fund is jointly run by the Chamber of Mines — representing employers — and worker unions.
The MIPF, which represents up to 166 mines across the country with a membership of 29 779, said tight liquidity constraints were hitting on its income source — contributions and rentals.
However, income was higher by seven percent to $41,5 million driven by improved performances in membership contributions, investment income and fixed income. But a 33% surge in provisions for doubtful debts hit the fund’s performance.
“The surplus was mainly affected by provision for doubtful debts which stood at $18 million for the year against a budget of $6,8 million and prior year provisions of $13,6 million, owing to the deterioration in collection levels for the current year,” the Chamber of Mines in its annual report said.
The rise in provisions resulted in a jump in total expenditure to $34,6 million from $28,3 million in 2012.
The MIPF’s investments are heavily skewed in favour of real estate which accounts for 57% the portfolio, followed by listed equities at 31%.
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Other investments are in the money market at 3,09%, prescribed assets at 3,78% and private equity at 3,39%.
The pension fund said it would maintain a “cautious” approach on new investments given the depressed economic environment. The MIPF increased membership pay-outs by 5% at the beginning of the year following an actuarial valuation. The increase took the benefit for the lowest paid pensioner to $63,66 per month while the highest paid gets $935,75
— The Source
