NBM PAL Unrestricted Pension Fund which is administered by the NBM Pension Administration Limited (NBM PAL), a subsidiary of National Bank of Malawi (NBM) Plc, has registered an increase in investment income for the year 2023 to 42 percent from 27 percent in 2022.
According to NBM PAL, Chief Executive Officer (CEO), William Mabulekesi, with inflation around 30 percent in 2023, members will get a real investment return of over 12 percent which is the difference between the declared investment income of 42 percent and inflation rate of 30 percent.
“It is a pleasure to share with the market that the Board of Trustees of the Fund has since approved an investment income as recommended for members of the Fund who participated fully in the year up to 31st December 2023. The Fund continues to register exponential growth in investment income and total assets for its participating members.”
“The significant increase means that if an individual member had been in the Fund from January to December 2023 with a total accumulated pension benefit of K10 million as of December, 31, 2023, the total accrued pension benefit will now increase to K14.2million with effect from January 1 this year,” said Mabulekesi.
He said this is exciting news, particularly to sponsoring employers and their respective employees who are the ultimate members and principal beneficiaries of the overall Fund which has continued to grow from strength to strength within the recent years.
“This for sure has put smiles on the faces of the Fund’s members. What is more satisfying with this declaration is the fact that it has been achieved at a time when our local economy has faced a lot of challenges such as forex shortage, natural disasters in cyclones, and a significant 44 percent devaluation of the local currency in November 2023 whose combined adverse effects unleashed upward pressures on prices of goods and services forcing the inflation to hover around 30 percent for the year 2023,” explained Mabulekesi.
He then hailed NBM Capital Markets Limited, another subsidiary of NBM plc, for Investment strategies employed amidst macroeconomic shocks that prevailed in the year under review.
A pension expert, who is also Director of Pension and Insurance at the Reserve Bank of Malawi (RBM) Paul Nyirenda believes that NBM PAL realized the growth due to investment returns largely from the stock market which performed well last year.
“It is also because of the decent performance of the listed equities at the Malawi Stock Exchange which has largely contributed to the increase in investment income for the Fund as companies declared dividends and capital appreciation. ,” said Nyirenda.
The Fund in question according to NBM PAL is diversified across all investment classes, namely Interest-Bearing Assets, Shares, and Properties including alternative investments which allow portfolio assets to hedge against each other from any exogenous factors thereby insulating it to remain resilient and profitable for its members throughout the year.