Pension Fund report laid in Parliament

– contributions on the rise; income hikes to $338 million

By Jarryl Bryan

Far from being mired in financial trouble, the Ministry of Finance-managed Dependents Pension Fund has seen an increase in contributions, and thus a hike in revenue as of 2017. This is according to the latest report from the board of directors.
According to the report, which was laid in the National Assembly on Monday by Finance Minister Winston Jordan, the Fund has seen a hike in total income to $338.7 million. This is $169.6 million more, a feat that may have something to do with an increase in contributions.
Under restated income, the report notes that contributions from members increased from $111.7 million in 2016 to $277.6 million last year. According to the report, administrative and general expenses did increase.
“The investments held on behalf of the fund amounted to $27 million at the end of the year. The value of the securities of the Guyana Government and other investments, including mortgages, totalled $107.1 million, representing 5.3 per cent of the total assets of the Fund. In addition, the Accountant General held a net sum of $1.561 billion at the end of 2017 on behalf of the Fund,” the report states.
The entity’s total assets stood at a total sum of $1.983 billion; an improvement from last year, when it was listed as $1.655 billion. Excluding the amount held by the Accountant General, $146.6 million of this sum is in receivables and prepayments, and $159.1 million in non-current assets.

Comparison to SWF
The Chairperson of the Fund, Jennifer Chapman, also happens to be the Accountant General. The directors include Professor Harold Lutchman, Lance Baptiste, Patrick Yarde, Lincoln Lewis, Amanda Hermonstine and Gillian Rockliffe.
At the end of last year, there were 25,072 active contributors to the Fund. On the other hand, there are 2,498 pensioners on the Fund’s Pension Status Report at the end of 2017.
Though it exists on a much smaller scale to what one expects from a Sovereign Wealth fund (SWF), there are similarities in their operations. And with the SWF green paper expected to be laid in Parliament shortly, sources have opined that

lessons ought to be learnt from this Fund.
Both funds are financed by a primary revenue stream. In the case of the Dependents Pension Fund, the primary revenue stream is contributions. In the case of the SWF, it will be oil. In theory, both also make investments in order to maximise that revenue, with the Dependents Pension Fund making money off investments’ interest, including mortgages in practice.
Minister Jordan had informed reporters on Friday last that the Green Paper – a report on Government’s proposals – was presented to Cabinet to be reviewed. According to Jordan, a second review will be done at the next Cabinet meeting on July 31.
“We will revise the paper in time for presentation to the last Parliament, which is on or before August 10, 2018,” he explained, adding that the draft legislation for the Fund is with the Attorney General’s Chambers.
“Once the AG’s Chambers are finished with that bill, it will get its review at Cabinet, and then we will put it out for consultations. We will take back whatever comments and then we will revise the bill and make it ready for Parliament,” he had explained, adding that the bill will be laid in the National Assembly by the year’s end.