Registrar's letters: 2002
Two letters have been issued.
[Note that I do not have original copies of these letters and have relied on the information contained in the Bulletin no. 2 of 2002 issued by the Zimbabwe Association of Pension Funds.]
Submission of unaudited schedule of assets
The letter reminds all insurance companies and registered pension funds that they must submit a schedule showing the Fund's assets each month
The schedules must be submitted by the 21st of the following month to which the schedule relates and failure to do so will attract a penalty.
Comment: There is not much to say about this. I assume that the requirement is to enable the Registrar's office to monitor compliance with the prescribed asset ratio.
Prescribed asset ratio
The reader is firstly reminded that the Prescribed Asset ratio is a statutory obligation and secondly that the industry has until 31 December 2002 to comply with this requirement.
(The original compliance date was 31 December 2001 but the industry was given 12 months grace.)
The letter notes that most funds have not complied with the 45% requirement and requests that each insurer should achieve the following progressive targets:
| Date | Percentage (of book value) |
| 31 March 2002 | 30% |
| 30 June 2002 | 35% |
| 30 September 2002 | 40% |
| 31 December 2002 | 45% |
Comment:The requirement is
straightforward. However, there is concern in the
industry because the low interest rate policy (coupled
with very high inflation) is still in force after the
Presidential Election.
The rates of return are extremely large and negative and
could cause serious problems for pension funds in
attempting to meet their liabilities