GIS - Mar 19, 2012: The portfolio of investment as regards the National Pensions Fund (NPF) and the National Savings Fund (NSF) amounted to over Rs 74 billion and Rs 14 billion respectively at end 2011. Both Funds have registered combined assets of an equivalent of Rs 89 billion. At the same period last year, the market value of the NPF portfolio totaled around Rs 70 billion while that of the NSF approximately Rs 13 billion. For the period December 2010 to December 2011, the Funds in the NPF and NSF schemes increased by Rs 4.1 billion and Rs 0.6 billion respectively.
These figures were released on March 16 in Port Louis by the NPF-NSF Investment Committee which is a tripartite body comprising representatives of Government, employers and employees. The Committee welcomed the positive returns registered by both Funds for the year 2011 and noted that performance has been good across the spectrum of asset classes where the overall returns were dominated by the substantial holdings in local fixed income instruments, especially Government of Mauritius Bonds and Treasury Notes in addition to foreign currencies deposits.
The Committee noted that both funds did not meet the benchmark targets in 2011, returning -0.4% and 0.8% over CPI inflation respectively. This situation is mainly attributed to the rise in inflation against the fixed rate holdings of both funds, the appreciation of the Mauritian Rupee against major currencies and the downturn in both local and equity markets.
Presently, the portfolio of the NPF is well diversified with international exposure, including foreign currencies at 18.8% and Equity exposure at around 19%. According to forecasts, given the current financial situation and future projections, the exposures could be increased over the coming months. The Committee is also seeking to ensure that the funds generate reasonable risk-adjusted returns under both positive and negative future market conditions in the long run.
For the year 2011, the NPF and the NSF funds have made several investments among which Local Government Bonds and Bills which constitute the core holdings. In December 2011 the Bank of Mauritius held its third auction for inflation-linked bonds during which both the NPF and NSF acquired bonds thereby adding Rs 660.5 million and Rs 160 million respectively to their portfolio.
As regards investment in property, during the second half of 2010, the NPF purchased two buildings in Ebène, namely Altima Building and Ebène Heights and returns for 2011 was 8%. As a strategy to diversify its portfolio the NPF purchased Rs 420 million in foreign equities and invested Rs 135 million in a Gold deposit.
The NPF, set up in 1978, is a two-tier system in which government finances payment of the universal basic pensions whilst earnings-related contributory benefits are paid to insured persons or their dependents, on the basis of contributions paid to the scheme by the insured persons and their employers. The NSF was launched in 1995 to replace the Employees Welfare Fund. Whereas the NPF is a benefits scheme, the NSF is a contribution scheme. At retirement age NPF beneficiaries receive a monthly pension based on a fixed formula, whereas those of NSF are eligible for a lump sum not fixed by any formula and depending largely on contributions made by employers and the investment performance.