According to the Botswana Public Officers Pension Fund (BPOPF)’s annual report for 2020/21, its accumulated funds and reserves amounted to P75.3 billion, a growth of 21.2 percent from the 2019/2020 financial year. The significant increase is due to favorable offshore equity prices in the financial markets.
“With COVID-19 still a threat to the economy, this movement may change either way,” a recently released report says. “There is still confidence that the Fund shall keep growing and recover after the COVID-19 impact.”
According to the report, BPOPF – which receives a percentage of members’ pensionable salaries as contributions – contributions received increased by 9 percent during the reporting period, from P3.5 billion in 2020 to P3.8 billion in 2021. “This result is mainly due to members’ annual salary increases,” it notes. “The BPOPF has experienced an increase related to the number of pensioners who are receiving a monthly pension.”

The report says one of the strategic measures of the Fund is the net replacement ratio (NRR), which indicates the average that members earn at retirement in relation to their final salary. In 2020, the NRR was 42 percent. “As at 31 March 2021, the Fund was in a financially sound position at 100.5 percent. Despite the effects of COVID-19 on the Fund’s assets, there is an indication that member benefits shall be settled when they become due,” it notes.
BPOPF’s assets under management grew from P67,17 billion in 2020 to P82.3 billion. “This is a 22.5 percent growth,” says the report. “This level of performance is contrary to what the COVID-19 pandemic is doing to economies. Real assets suffered but emerging market and developed market equities have done very well over the last 12 months.”
The report notes that economic activity is still under stress in many countries, with lockdowns resurfacing now and then. “It is under turbulent times such as these that strong risk management approaches such as portfolio diversification across regions, sectors and countries cannot be over-emphasized,” it observes.
The report shows that its financial statements have been prepared on the basis of accounting policies applicable to a going concern. “This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business,” it says.
It points out that the ability of the Fund to continue as a going concern is dependent on a number of factors, the most significant of them being that directors continue to procure funding for ongoing operations of the Fund.
Regarding contingent liabilities, BPOPF says it has become aware of potential obligations in relation to a former staff member, Shadrack Bayane, for unfair dismissal to the tune of P260,556.60. The trial was scheduled for 29-30 June 2021. Another one is for another former staff member, Nabulani Lenyatso, for unfair dismissal in the tune of P196,946.88. The trial was also scheduled for 29-30 June 2021.
A more critical potential obligation that BPOPF is struggling to untangle itself from is the collapse of CMB, a development that could also blight the Fund’s track record. “Capital Management Botswana and Capital Management Botswana Fund 1 (Pty) Ltd have both been placed under liquidation,” the report points out. “BPOPF is a participant in this liquidation, total claim approximately P142 million.”
In August 2014, CMB won a tender to manage P500 million on behalf of BPOPF. However, BPOPF has lost litigation against CMB for mismanaging the funds.
The report says another obligation relates to Charles Moshabi, a member who wants payment of his balance in a lump sum of P41 167.02. The matter is continuing in court. “We are yet to get dates of hearing,” the report notes. “Kelebogile Macheng, the applicant, seeks to nullify the death pension benefits allocation. The parties are pursing settlement of the matter. The most likely outcome is that the Fund will re-assess the allocation of benefits.”
Yet another obligation relates to one Phiri and other unidentified complainants who were seeking an order declaring BPOPF’s decision to allocate pension death benefits to one of the respondents unlawful.
“The Fund has completed the re-allocations and the beneficiaries were duly notified in writing,” says the report. “Some of them are satisfied with the outcome and (have) accepted it. The ones not allocated any benefits are not satisfied with the Fund’s decision to exclude them from the allocations. They have not lodged any case against the Fund, despite the expiry of the period granted to them. The Fund proceeded with payments.”