BUSINESS - COMPANIES | 2013-08-01David Nuyoma
GIPF waiting for new investment regulation
WHEN we requested an interview with Government Institutions Pension Fund (GIPF), CEO David Nuyoma, he said he would not entertain questions regarding the failed Development Capital Portfolio (DCP), in which the fund lost about N$600 million in bad investments because he said the matter was sub-judice.
Nuyoma tells Chamwe Kaira how he handles the pressure cooker job, a new government investment regulation and the Fund’s future plans.
The Namibian (TN): You assumed office in January, how have you have found the job so far?
David Nuyoma (DN):Yes, I assumed duties at GIPF officially on 1 January 2013. But since the first was a public holiday, I came to office on 2nd January. I found that GIPF has a good and well-trained staff compliment who are committed and knowledgeable. Despite the negative publicity they did not waiver. There is a Board and Chairperson who certainly have the interest of members at heart and without doubt want to see that the Fund continues to grow and serve its members satisfactorily.
I found that GIPF is one of the best performing business entities in the country. The Fund has seen excellent growth during the past five years. It has grown from N$30 billion to N$63 billion in 2013. The Fund has done relatively well compared to other funds in Namibia, in the region and internationally. It has become the single most significant financial and business entity in the country. I take off my hat for the forefathers who saw the need to create this fund to look after the interest of workers in the public sector in their retirement and times of loss.
TN: The job comes with a lot of pressure, why did you take this job?
DN: Yes, as an executive there is always pressure and a sense of accountability. I felt that DBN has come to a stage of mature momentum and the staff and management with the guidance of the board can manage the way forward. I came to GIPF because of the challenge and willingness to serve. I get satisfaction from serving fellow Namibians. It is indeed a privilege to serve our members during their time of need.
TN: Because of what happened in the past (N$600 million bad investments), no matter what good the GIPF does, there is always a negative perception of the Fund, is this something the company will have to live with?
DN: I am confident that over time and our positive service to our members and excellent growth, we will overcome the negativity. Obviously we see the media as a natural partner to communicate the positive message. It will take time, but time will heal the image.
TN: When are you going to resume funding unlisted companies, what are you waiting for and how much have investors requested?
DN: We never stopped funding unlisted investments. A moratorium was placed on appointing new managers and making further new allocations. However, we have made a commitment of N$2,38 billion and so far N$880 million has been disbursed. Therefore we are still investing through the existing allocations.
We are waiting with great interest and anticipation the imminent gazetting of Regulation 29 which sets the governance framework of investments of pension funds in unlisted instruments. Thereafter, the performance of unlisted investments would hopefully inspire the necessary confidence to the relevant authorities to reconsider the moratorium.
As for now, there are still substantial funds that have not been utilised that can be accessed through the Special Purpose Vehicles that were created to manage GIPF funds into the unlisted space. And those with viable propositions can access such funds by contacting these SPVs directly or through our Investment Department. The current areas of focus are: property development, private equity and micro finance.
TN: Twenty years from now, will your members be able to draw good pensions?
DN: Yes indeed. The GIPF is a Defined Benefit Fund, which implies that the benefit of members are guaranteed by the employer. However, be that as it may, the investment strategy of GIPF is geared to ensure long-term sustainability and based on an asset/liability modelling. The performance of the Fund has resulted in substantial surplus and reserves were created to cushion the hard times that may come our way in the future. In this regard, the last actuarial valuation concluded that the Fund is financially sound with funding levels of 103,6% which include contingency reserves for longevity, employer contribution, Aids and data uncertainty. It is important to resist the temptation to erode any of our reserves to make provision for any eventuality in the future.
TN: What are the future plans of the GIPF?
DN: The GIPF has a five-year strategic plan to grow the Fund, to come up with innovative ways of enhancing product offering of which the immediate one is housing loans for members, etc. We must also find solutions to the challenge of submission of inadequate information by employers to GIPF which create inefficiencies and delays in the provision of services to members. Furthermore, the Fund also has to work hard to make its services known to the public and significantly improve its public standing and image. The Fund is also looking at the value it can add to the development of the Namibian economy. In this regard, we are looking at expanding our Investment Policy with a stronger development component.
TN: Anything else of importance that you wish to add?
DN: It is important for the public to know that the GIPF offers very important services to its members such as pension pay-outs, monthly annuities, funeral benefits, payment to dependents of members who are deceased. In this regard, the beneficiaries of GIPF should renew their proof of existence at GIPF offices countrywide or through partner institutions such the Post Offices. The GIPF is a national asset that deserves respect.
The Namibian (TN): You assumed office in January, how have you have found the job so far?
David Nuyoma (DN):Yes, I assumed duties at GIPF officially on 1 January 2013. But since the first was a public holiday, I came to office on 2nd January. I found that GIPF has a good and well-trained staff compliment who are committed and knowledgeable. Despite the negative publicity they did not waiver. There is a Board and Chairperson who certainly have the interest of members at heart and without doubt want to see that the Fund continues to grow and serve its members satisfactorily.
I found that GIPF is one of the best performing business entities in the country. The Fund has seen excellent growth during the past five years. It has grown from N$30 billion to N$63 billion in 2013. The Fund has done relatively well compared to other funds in Namibia, in the region and internationally. It has become the single most significant financial and business entity in the country. I take off my hat for the forefathers who saw the need to create this fund to look after the interest of workers in the public sector in their retirement and times of loss.
TN: The job comes with a lot of pressure, why did you take this job?
DN: Yes, as an executive there is always pressure and a sense of accountability. I felt that DBN has come to a stage of mature momentum and the staff and management with the guidance of the board can manage the way forward. I came to GIPF because of the challenge and willingness to serve. I get satisfaction from serving fellow Namibians. It is indeed a privilege to serve our members during their time of need.
TN: Because of what happened in the past (N$600 million bad investments), no matter what good the GIPF does, there is always a negative perception of the Fund, is this something the company will have to live with?
DN: I am confident that over time and our positive service to our members and excellent growth, we will overcome the negativity. Obviously we see the media as a natural partner to communicate the positive message. It will take time, but time will heal the image.
TN: When are you going to resume funding unlisted companies, what are you waiting for and how much have investors requested?
DN: We never stopped funding unlisted investments. A moratorium was placed on appointing new managers and making further new allocations. However, we have made a commitment of N$2,38 billion and so far N$880 million has been disbursed. Therefore we are still investing through the existing allocations.
We are waiting with great interest and anticipation the imminent gazetting of Regulation 29 which sets the governance framework of investments of pension funds in unlisted instruments. Thereafter, the performance of unlisted investments would hopefully inspire the necessary confidence to the relevant authorities to reconsider the moratorium.
As for now, there are still substantial funds that have not been utilised that can be accessed through the Special Purpose Vehicles that were created to manage GIPF funds into the unlisted space. And those with viable propositions can access such funds by contacting these SPVs directly or through our Investment Department. The current areas of focus are: property development, private equity and micro finance.
TN: Twenty years from now, will your members be able to draw good pensions?
DN: Yes indeed. The GIPF is a Defined Benefit Fund, which implies that the benefit of members are guaranteed by the employer. However, be that as it may, the investment strategy of GIPF is geared to ensure long-term sustainability and based on an asset/liability modelling. The performance of the Fund has resulted in substantial surplus and reserves were created to cushion the hard times that may come our way in the future. In this regard, the last actuarial valuation concluded that the Fund is financially sound with funding levels of 103,6% which include contingency reserves for longevity, employer contribution, Aids and data uncertainty. It is important to resist the temptation to erode any of our reserves to make provision for any eventuality in the future.
TN: What are the future plans of the GIPF?
DN: The GIPF has a five-year strategic plan to grow the Fund, to come up with innovative ways of enhancing product offering of which the immediate one is housing loans for members, etc. We must also find solutions to the challenge of submission of inadequate information by employers to GIPF which create inefficiencies and delays in the provision of services to members. Furthermore, the Fund also has to work hard to make its services known to the public and significantly improve its public standing and image. The Fund is also looking at the value it can add to the development of the Namibian economy. In this regard, we are looking at expanding our Investment Policy with a stronger development component.
TN: Anything else of importance that you wish to add?
DN: It is important for the public to know that the GIPF offers very important services to its members such as pension pay-outs, monthly annuities, funeral benefits, payment to dependents of members who are deceased. In this regard, the beneficiaries of GIPF should renew their proof of existence at GIPF offices countrywide or through partner institutions such the Post Offices. The GIPF is a national asset that deserves respect.
