Pension funds boost as blue chips declare dividends
Most pension funds received a boost last year after several blue chips declared dividends, official data indicated.
The crisis is that hyperinflation and sky-rocketing prices may erode the value of the funds by the time they are paid out to pensioners.
Figures from the Zimbabwe Stock Exchange showed that pension funds earned significant dividends in the past year when best performing stocks such as Axia Corporation, Delta Corporation, Econet Wireless, FBC Holdings and Innscor Africa, among others, declared dividends.
A snap survey conducted by NewsDay Business shows that pension and mutual funds, including the National Social Security Authority (Nssa), Old Mutual Life, Local Authorities Pension Fund and the Mining Industry Pension Fund, control an average 20% shareholding in listed stocks.
The declaration of dividends at a time when the economy is recovering from the coronavirus pandemic impact is expected to cushion millions of pensioners and mutual fund beneficiaries.
For instance, when CBZ Holdings declared an interim dividend of $350 million, or 67,05 cents per share, for the half year ended June 2020, pension funds received $70 million for their 20% stake in the listed financial services group. It was the same for pension funds with shares in FBC Holdings, who received $70,84 million for the 35,42% shares in the group, out of the $200 million dividend declared.
Old Mutual Life Assurance, Mining Industry Pension Fund, Nssa, Public Service Commission Pension Fund, and the Communication and Allied Industries Pension Fund, which hold a 11,08% shareholding in Innscor Africa, got $71,35 million when the group declared a $644 million dividend in the 12 months to June 2020.
In addition, the diversified conglomerate also declared a final annual dividend of $28,2 million to Innscor Africa Employee Share Trust (Private) Limited.
Axia Corporation declared a $126 million dividend in the full year to June 2020, which saw pension funds being rewarded with nearly $22 million for their 17,02% stake in the group.
The company later added $5,2 million to its employee share scheme.
Beverages manufacturer Delta Corporation paid out $112 million to pension funds when the group declared a $560 million dividend to shareholders for the half year ended September 30, 2020.
More than eight pension funds hold a 19,9% shareholding in the blue-chip counter, which has been consistently good value for its shareholders.
Hippo Valley added a sweetener to pension funds which got nearly $50 million for their 20,68% stake in the sugar producer that declared an interim dividend of $234 million for the six months ended September 30 2020.-newsday
