Pensions and Insurance Authority (PIA) has confirmed […]

Pensions and Insurance Authority (PIA) has confirmed that concerns raised by members of Saturnia Regna Pension Fund regarding reduced pension balances have been brought to its attention and are currently receiving regulatory consideration.

 The development comes barely shortly after Saturnia Regna Pension Fund, a fund under Aflife Investment Limited and administered under Aflife Pension Administration Limited, dismissed allegations that it had sliced down pension contributions for its more than 36,000 contributors, insisting that only investment returns had been adjusted in line with approved fund governance procedures.

In a statement previously availed to the Zambian Business Times – ZBT, Saturnia Regna Pension Fund Board Chairperson, Victor Zimba maintained that members’ contributions had remained intact and that account movements were merely a reflection of revised interest rates following the adoption of audited financial statements.

“It is important to note that members’ contributions have not been affected and as of 1 January 2025 to date, members accounts have posted a positive growth,” Zimba stated.

However, responding to a press query from the Zambian Business Times – ZBT, PIA Acting Communications Manager, Lungowe Mulunga Lukwesa, revealed that Aflife Pensions Administration had formally brought member concerns to the regulator’s attention.

 “Aflife Pensions Administration, the pension fund administrator of Saturnia Regna Pension Fund, has brought the concerns of its members to the attention of PIA and the matter is receiving due consideration,” said Lukwesa.

The confirmation raises a question, if contributions and accrued benefits were not materially affected, what exactly triggered sufficient concern among members for the matter to reach the country’s pension regulator?

Meanwhile, PIA explained that fluctuations in pension balances can occur because pension funds invest member contributions into different investment channels whose values rise and fall depending on market performance.

 The Authority noted that pension schemes commonly apply interim interest rates before annual audits are completed, adding that such rates are provisional and subject to adjustment once audited financial statements are finalized.

 “Members should note that the interim rate is provisional and should not be regarded as the final rate of return for the financial year,” she said. Lukwesa explained that where final rates differ from interim rates, appropriate adjustments are made to ensure benefits accurately reflect actual investment performance.

However, while the regulator has explained the legality of interim and final rate adjustments, the issue at the center of public concern appears less about regulatory procedure and more about communication, perception and transparency regarding why balances visible to members appeared lower than previously reflected.

 PIA further told ZBT that its role is to ensure that such adjustments are undertaken according to approved scheme rules and are applied fairly, consistently and equitably to all members. The Authority also disclosed that pension schemes are required to communicate fund performance through annual benefit statements and Annual General Meetings where members are expected to receive explanations regarding investment performance, governance matters, and developments affecting accrued benefits.

As the regulator continues reviewing the concerns raised by contributors, the question many members may now be asking is, if the adjustments were routine, compliant, and expected, why were enough contributors alarmed by declining balances to trigger complaints that eventually reached PIA?

Article by Phillip Sinkala