BPOPF Prepares For Emergency Pension Fund Withdrawals :: Mmegi Online
At present, members of pension funds can only collect their benefits when they reach retirement age and start collecting monthly payments. However, with disposable income squeezed, including loss of assets and rising medical bills, lawmakers pushed for upcoming changes to the pension law to allow for terms under which members could tap into their retirement savings in case of an emergency.
The Ministry of Finance and Economic Development is finalizing amendments to the law on pension funds to allow members of pension funds who have not yet started to receive a monthly annuity to obtain loans from their funds under conditions specific funds or to use part of the accrued pension as collateral.
The BPOPF had previously expressed reservations about the proposed changes, saying pension funds were integral to members’ financial stability after retirement.
This week, the pension fund‘s senior director, Moemedi Malindah, said the proposed changes, with the intended limitations, could benefit pension fund members in financial difficulty.
“As a retirement fund, we believe the spirit of these amendments will benefit members and help improve their well-being, including the provision of housing and other essentials,” he said. he declares.
Finance Minister Peggy Serame recently told parliament that the department had returned draft amendments for finalization by the attorney general’s office. The question of allowing members of pension funds to withdraw part of their rights came up several times during the responses of legislators to the 2022 Budget Speech.
“We want to have opt-out clauses so that when someone has a problem like health or when their house is about to be taken away, they can take some of that money,” she said. “But please listen to me clearly: it’s not about taking all the money. “I have to point out that we are not proposing a law where someone can go and take their entire pension. “I would be irresponsible to do that or allow that because we have to remember what a pension is for. “It’s so that when someone quits their job, they can be supported.”
Serame added: “We recognize that with our existing law, it is difficult that it can help someone who has problems like the times we are coming from with the pandemic. “It would be difficult for someone to pay for their property not to be washed away or to get health services. “As much as we make it easier, it won’t be bulela ditswe (free for all). “We will continue to protect Batswana so that when they retire they have something to help them afterward.”
Meanwhile, the BPOPF says it has yet to invest its PP3 billion allocation for local infrastructure because it has failed to hire an infrastructure fund manager for the funds.
“That’s because the asset class is very specialized and there aren’t readily available local infrastructure fund managers,” Malindah said. “The fund has thus embarked on a local infrastructure incubation project, which is still ongoing. “It is expected that such a decision will contribute to the development of this asset class in the country.”
With assets of over P80 billion, the BPOPF is the largest pension fund in the country. However, he has been criticized for failing to invest significantly in local infrastructure, especially at a time when government resources are stretched by COVID-19.
The BPOPF has previously invested in infrastructure outside of Botswana, placing $10 million with the Pan African Infrastructure Development Fund in South Africa in 2014. However, the PP 3 billion allocation will be the first to target opportunities local.