Mutual ready for Reg 28 and 29
Leading financial services group Old Mutual said it is well-positioned to meet the requirements of the amended Regulations 28 and 29 that came into effect on 01 January 2014.
In an interview following the release of the financial services provider’s 2013 financial results on Tuesday, Johannes !Gawaxab, MD for Old Mutual Africa Operations said the establishment of the MIDINA (Managing Infrastructure Development In Namibia) Fund in 2004 will make it easy for the company to satisfy the requirements of Regulations 28 and 29. According to the amended Regulation 28 of the Pension Funds Act of 1956, a pension fund is compelled to invest a minimum of 1.75% and a maximum of 3.5% of the market value of its investments in unlisted investments in Namibia within a period of 12 months.
Results for the financial year ended 31 December shows that Old Mutual had N$31 billion in funds under management, a 15% increase from the previous year. The Financial Results also showed that the MIDINA Fund has invested N$980 million in unlisted investments since 2004 mainly through the construction of shopping malls, a hospital and infrastructure development in the tourism sector. ! Gawaxab said these investments qualify as unlisted investments, adding that meeting the requirements of Regulation 28 “is not going to be a big issue for us.” In addition, the fund has set aside a further N$100 million to be used in servicing land. Already three projects in Walvis Bay, Ongwendiva and Keetmanshoop worth around N$70 million have been approved. The projects are expected to start within the next nine to 12 months once all the municipal regulations have been met. Old Mutual’s first property venture in Keetmanshoop, will be inaugurated later this month. Despite the investment in infrastructural development projects, !Gawaxab said he does not see Old Mutual fund the recently launched National Mass Housing Initiative. He said: “I can not see us involved in that space. We will probably continue with servicing of plots, however, if the government issues bonds to fund this initiative and the price is right and it meets our maturity requirements, we will definitely have appetite for that.” Old Mutual currently holds about 20% of all government bonds. !Gawaxab also said there are no plans to offer pension-backed home loans to members as Old Mutual does not have the mandate from members to do so. The Government Institutions Pension Fund (GIPF) last week said it was ready to introduce pension-backed home loans to its members following the amendment of Regulation 27 of the Pension Funds Act in January, but !Gawaxab said Old Mutual will for now not venture into such a scheme. “Our mandate is to invest in equities and bonds. That mandate comes from the owners of the money not from the financial institution and so far we have not received any requests or mandate on pension-backed home loans,” he said.