The Botswana Pensions Society (BPS) conference is an annual event that brings together stakeholders from across the pension industry including retirement funds, trustees, asset managers, audit firms, consultants, insurers and custodians. With over 70 members, the BPS is well poised to unite stakeholders to advocate for the retirement industry, promote retirement planning, support legislative change, and raise awareness about holistic planning for retirement.
In its 19th iteration under the theme, “Pension funds in Botswana, exploring the future, with innovation, sustainability and growth”, an enthralling discussion unfolded over the course of two days. The Ministry of Finance – Insurance and Pensions, set the tone by urging the industry to enhance financial literacy efforts, and leverage technology to create real-time information (which should be the norm in this era of digital transformation). They also challenged all members to drive improvements in pension penetration and net replacement ratios and called on all brilliant minds to collectively develop solutions for providing pensions to the informal sector, while reminding the audience that the purpose of a pension is to provide an income post-retirement or during old age.
The Non-Bank Financial Institutions Regulator (NBFIRA) provided an in-depth update on the changes to the Retirement Funds Administration Rules, highlighting developments across all thirteen administrative rules, and unpacking the three new Pension Fund Rules (PFR); PFR11 – Pension Fund Administrator Rules, PRF12 – Pension and Provident Funds Benefit Payment Rules and PFR13 – Pension Fund Members Rights and Rules. A detailed update was also provided on PFR2 – The Pension fund investment rules which commenced in June 2023.
Pension Fund Rule No. 2 addresses:
- The increase in the local investment limit from 30% to 50% to be undertaken over a 5-year period from December 2023 to December 2027.
- An increase in the private equity investment limit from 5% to 10%.
- The introduction of a new asset class – infrastructure.
- The introduction of Environment, Sustainability and Governance as factors for responsible investing.
As at December 2024, total Assets Under Management (AUM) were at BWP 152.3 billion - up from BWP 130.5 billion in June 2023; with BWP64.6billion of these assets invested locally - 42%; which is above the 41% requirement as of December 2024. The industry looks set to achieve its December 2027 target of 50% local investments. The newly created asset class - infrastructure - had an allocation of BWP 16million as of December 2024, demonstrating progress with the initiatives introduced by the PFR changes.
The keynote speaker, Mr Alex Burn of the Malaczynski Burn Group, highlighted the risks and complexities in the current macro-economic environment, and their potential impact on the Botswana Pension Society. Central to his presentation, Mr Burn asserted that, “The obligation of the financial services sector is to the beneficiaries of the monies to whom we are stewards.” He encouraged ongoing efforts to enhance technical competence across the industry, not only to comply with legislation, but to challenge it after thorough consideration and analysis. Participants were urged to embrace the complexities of the modern world through exploration and adopting risk management solutions. Lastly, he reminded the audience that creating a better world for all requires that we put aside self-interests, and collectively work towards creating a fairer, safer, and more equitable world.
The conference addressed topics such as optimising pension opportunities, technological innovation, and sustainable investing. Dr P. Serero, a healthcare professional, entrepreneur and advocate, challenged participants to adopt a holistic approach to retirement planning. He emphasised that this approach should address not only the financial aspects of retirement, but also non-financial elements including physical and mental health, spirituality, and cognitive engagement (life’s purpose beyond formal employment), as well as social connections, legacy, and community service.
The event culminated in a gala dinner hosted by RMB Custody, where our esteemed colleagues Mr Dintle Samboma – Head of Custody and Trustee Services at RMB Botswana, and Mr Sifiso Ndala – Head of Global Securities Services at RMB Global Markets, provided insights into the role of the custodian in the pension fund industry, along with global anecdotes. He unpacked international best practices undertaken by custodians, the future of custodial services, and new opportunities that will ultimately benefit the beneficiaries of pension funds. Mr Ndala emphasised the need to stay informed and compliant with the regulatory environment. He also highlighted the importance of proactively engaging with regulators to establish future developments, and create platforms for discussion and advocacy such as the BPS conference. He commended the BPS for their role in developing the pension fund industry, and for being a champion of the retirement industry. ‘As RMB Custody, we remain committed to serving our clients by forming close partnerships with customers and stakeholders across the industry, providing guidance with compliance and regulatory matters, and ensuring the safe keeping of the assets entrusted to us for the benefit of fund members.’, said Mr. Ndala.
Ms. Baile Corrigan, Head of Global Markets at RMB Botswana commended the Botswana Pension Society on its 19th Annual conference. ‘This event is a testament to the organisation’s commitment to advocating for the retirement industry and promoting retirement planning. As RMB Custody, it is a privilege and an honour to be part of an event of this nature. It is our goal to continue serving our current and future clients through exceptional customer service, state of the art technology, and innovative solutions. We are looking to expand our impact beyond the formal sector and be part of the solution that also provides pensions to the informal sector.’
