Nssa writes off $6m loans

via Nssa writes off $6m loans – DailyNews Live 20 October 2014 by Kudzai Chawafambira

HARARE – Pensions administrator National Social Security Authority (Nssa) has written off $5,6 million in loans inherited from now defunct Capital Bank Corporation Limited (Capital Bank).

The bad loans surged from $52 073 in 2012.

Capital Bank is 87 percent-owned by Nssa.

Patrick Mapani, the authority’s finance director, said the loans, struck off the books last year, were not extended to Capital Bank by Nssa, but “it is the bank which actually gave out loans to its clients and now writing off some of them”.

“The figures are exactly as per the Capital Bank audited financial statements and we are seeing them on Nssa financial statements because of consolidation,” he said.

In Nssa’s financials for the year to December 2013, general manager James Matiza said the consolidation of Capital Bank, together with First Mutual Holdings Limited, contributed about $202 million (24 percent) to total assets.

This comes as Capital Bank shut down in June this year after the Reserve Bank of Zimbabwe (RBZ) cancelled its licence.

Nssa, as the major shareholder, was reluctant to inject additional capital into the bank.

“The bank has been operating in an unsafe and unsound financial condition characterised by critical undercapitalisation, persistent losses, chronic liquidity challenges and inordinately high levels of non-performing loans,” said the central bank.

Meanwhile, Nssa increased benefits pay out to $148,9 million last year from $115,7 million in 2012.

The benefits included retirement, invalidity, survivor’s and workers’ compensation insurance fund claims.

Nssa noted that the increase in benefits was largely attributable to the increase in minimum pensions, an increase in the number of beneficiaries and the increase in the maximum insurable earnings limit.

This comes as an estimated 75 companies closed shop last year leaving close to 9 000 workers without jobs, according to Nssa.

“This is a major concern for the authority, as it is likely to affect pension benefit levels payable to the affected employees on retirement,” said Nssa’s chairperson Ngoni Masoka.

Total Workers’ Compensation Insurance Fund premiums went also up by 21 percent to $58,5 million in 2013.

Income from pension contributions went up 27 percent to $173,4 million from $136,3 million in 2012.

The authority’s assets grew 17 percent to $1 038 billion from $886,6 million, exceeding the one billion dollar mark for the first time since the introduction of multiple currency system in 2009.

Minimum retirement pensions went up in August 2013 from $30 to $60, while the minimum invalidity pension and minimum survivor’s pension went up from $20 to $30 per month.

Nssa said the number of pension fund beneficiaries increased from 152 952 in 2012 to 167 926 in 2013.

Workers’ Compensation Insurance Fund beneficiaries increased from 7 257 in 2012 to 9 313 in 2013.

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