The Local Authorities Pension Fund has been granted prescribed asset status for a US$3.8 million investment in the Kwekwe Shopping Mall, according to a social media update citing the Insurance and Pensions Commission (IPEC).
Prescribed asset status is conferred by IPEC on qualifying instruments, allowing institutional investors such as pension funds to count the investment towards their statutory prescribed asset holdings. The designation is intended to channel long-term savings into projects considered beneficial to national development, including infrastructure, housing and commercial property.
The update noted that pension funds currently hold only about eight percent of their portfolios in prescribed assets, against a regulatory minimum of twenty percent. This shortfall mirrors a broader pattern flagged repeatedly by IPEC in recent years. The regulator’s most recent industry reports have shown that pension funds, life assurers and short-term insurers have consistently fallen short of their respective prescribed asset thresholds, despite IPEC’s efforts to expand the pool of qualifying instruments available to the market.
IPEC data from the past two years shows the pensions industry’s prescribed asset ratio rising gradually, from around nine percent to roughly twelve percent, still well below the twenty percent benchmark. The regulator has attributed the gap partly to the limited supply of suitable long-term instruments and partly to funds favouring investment property and quoted equities, asset classes that made up the bulk of industry portfolios in recent reporting periods.
The Kwekwe Shopping Mall investment adds to a growing list of commercial property developments drawing pension fund capital across Zimbabwe’s provincial towns. Such projects are typically seen as offering pension funds a hedge against currency volatility, while also supporting local commercial infrastructure and job creation in urban centres outside the capital.
IPEC has previously indicated that it will continue to expand the range of approved prescribed asset instruments, including recent approvals allowing offshore investment of up to fifteen percent of fund values, as it seeks to improve compliance across the sector. The regulator retains powers to compel non-compliant institutions to redirect their holdings towards qualifying instruments, and in extreme cases to cancel the registration of persistently non-compliant entities.
For the Local Authorities Pension Fund, the Kwekwe Mall designation represents a step towards narrowing its own compliance gap while supporting a tangible commercial development in the Midlands town. As more local pension funds pursue similar arrangements, the sector will be looking to close the gap between actual and required prescribed asset holdings, a shift that could unlock further funding for infrastructure and commercial projects across Zimbabwe’s regional centres.
