Paul Masie
Paul Masie, Managing Director (MD) of Alexander Forbes Botswana has left his plum post. This follows an audit query by the audit firm’s client the major pension fund the Botswana Public Officers Pension Fund over a missing P1.5bn. Masie says his retirement has got nothing to do with audit queries at the BPOPF.
The audit query by BPOPF actuaries has revealed that during the time when Masie’s company, Alexander Forbes administered BPOPF funds, about P1.5 billion was unaccounted for.
In a phone interview, Masie told The Business Weekly & Review that, “I retired in fact. Its old news and I don’t see why you would want to write about it.” Masie leaves at a time when Alexander Forbes is under a cloud. An audit by BPOPF actuaries discovered the billion Pula hole in the pension fund’s books.
Alexander Forbes was providing Financial Services to BPOPF. The services included collection of members’ contributions and administration of benefits for a period in excess of 15 years, April 2001 and May 2016.
BPOPF pulled out of the contract, after it sought to self-administrate. More than a year down the line, BPOPF gave data compiled by Alexander Forbes to the actuaries, who in their audit, reveal that almost P1.5 billion was never declared to the BPOPF, although the money had been claimed to have been paid to some accounts.
Masie said he was aware of the issues raised in the audit, but stressed that their contract with the BPOPF ended a year ago, and that all the data has been given to the BPOPF. “The relevant people to speak to, are at the BPOPF,” he said before cutting the interview short.
At the BPOPF, Principal Officer Boitumelo Molefe said the Fund has engaged an independent forensic investigator to verify whether the findings set out in the actuary’s report are correct. “It’s a data issue. So we are investigating data discrepancies,” she said.
When pressed further to explain whether or not Alexander Forbes had violated their contract and governing legislation, she said that, “We have no evidence of any wrong doing on anyone’s part yet, which is why we are investigating. It may be that the actuary is wrong or that we have incorrect data. These things usually happen when you transfer large volumes of money.”
Masie has been at Alexander Forbes for 20 years. There however, has not been any official public announcement made about his departure. “But we have written to our clients and told them,” he explained when asked about the lack of a public announcement.
With over 30 years of experience, he is arguably one of the most respected pension fund administration managers in the country. He is praised to have seen the growth of some of the biggest pension funds including the Debswana Pension Fund and the Barclays Bank Staff Pension Fund. Those within the industry attribute to him the introduction of the first Umbrella Fund, the Alexander Forbes Retirement Fund, which made it possible for smaller companies which would not otherwise afford the expenses of setting up their own pension funds to be able to save for their employees under the Fund.
Despite the data discrepancy under investigation, Masie is also said to have been instrumental in the shaping and growth of the BPOPF, managing it from a mere P1.9 billion at inception in 2001 to a massive P51 billion in 2015, free of scandal over the years. Masie has also managed the Group’s Africa branches in the SADC region and some East and West African countries. The coincidence of his retirement and a forensic audit on the data discrepancy has raised concern among industry players.
Some have raised eyebrows as to the coincidence of his retirement and a forensic audit on the data discrepancy.
Three years ago, Masie lost the lucrative contract to administer the largest pension fund in the country, BPOPF. This was the result of a heavily speculated and somewhat hasty decision by the Regulator Non-Bank Financial Institutions Regulatory Authority (NBFIRA), to allow self-administration by the Pension Fund.
The loss of the contract caused reduced earnings at Alexander Forbes because BPOPF was its cash cow, as the largest pension fund in the country. The BPOPF contract was attributed to being responsible for the growth of Alexander Forbes.
Masie leaving the company could not come at a worse time, according to sources. Insiders link the company performance to Masie, although he said he left because it was his time to retire. “Confirmations have also been made about the internal audit that the Alexander Forbes Group has carried out on the Botswana branch, of which the results have been kept top secret.”, said a source.
While Alexander Forbes took a hit from the loss of the BPOPF contract, NBFIRA has implemented additional statutory requirements which will force the BPOPF to re-issue the tender. However, The Business Weekly & Review has established that this time around, there is a new kid on the block, politically connected who could be favored for the fund administration tender at BPOPF. The company and its politically connected directors are known to The Business Weekly & Review and have already been given a license by NBFIRA.
The new Retirement Fund Act (RFA) of 2014 will see all pension funds in Botswana ceasing self-administration and in-house investments, a move that will force BPOPF to outsource fund administration, three years after it cancelled the Alexander Forbes contract.
NBFIRA facilitated parliament to pass the new RFA on the 27th August 2014, a legislative instrument than came into operation in April 2017. Under the Act, NBFIRA requires all pension funds to operate only after being issued by the authority, a license to operate as a retirement fund, which will only be issued after Chief Executive Officer (CEO) of the authority, Oaitse Ramasedi, satisfies himself that all requirements as per the Act, have been met.
Under section 15 of the Act the board of the retirement fund is compelled to appoint and manage service providers who will perform the functions required by a licensed fund, including, an administrator who shall maintain the membership records of the licensed fund. The administrator will also collect contributions on behalf of the licensed fund, pay benefits as well as remit any excess moneys to the investment managers where appropriate. Interestingly, it is also the NBFIRA, which shall license an administrator who shall be appointed by the retirement funds to manage their functions. Section 21 of the new RFA reads that a person shall not act as an administrator if the person is not licensed under this Act. The administrator shall be required to maintain such books of accounts of a fund and other records as may be necessary for purposes of administering the fund according to the Act.
