BFA Bank Launches Pension Management Company in Angola

Luanda – Angola’s pension market has expanded with the introduction of “BFA Pensões,” a new Pension Fund Management Company S.A from the BFA business group. This addition brings the total number of operators in this sector to nine.

According to Angola Press News Agency, the company, incorporated in November 2022 and licensed by the Angolan Agency for Insurance Regulation and Supervision (ARSEG) in May, was recently launched in Luanda. António Matias, chairman of the Board of Directors of BFA Pensões, outlined the company’s strategy in a market with relatively low pension fund penetration. He emphasized the firm’s readiness to create and manage both open and closed pension funds in Angola, especially under the new regulatory framework set by Presidential Decree nº 161/22, which caps retirement pensions at Akz 607,874 (US $728).

BFA Pensões aims to develop retirement solutions that complement the state’s Social Security System, addressing the needs of workers as they approach retirement. From 2024, the company plans to manage its first pension fund, starting with BFA employees’ pensions, one of the three largest in Angola. Additionally, they are looking to launch an open fund for independent professionals, private clients, and other interested individuals. This fund will offer benefits for retirement and support for the education of minor children.

The CEO also mentioned that BFA Pensões has been engaging with various public and private entities to offer pension fund creation and management services. This approach seeks to provide an investment option that enhances the quality of life for workers at retirement age and addresses social inequalities.

Furthermore, BFA Pensões intends to play an active role in Angola’s economic development, mirroring the impact of pension funds in other countries where they have become significant financial empowerment tools for private companies, boosting productivity, wealth, and employment.

Maria Bernardo, President of the Board of Directors of Banco de Fomento Angola, commented that the launch of BFA Pensões showcases the bank’s dynamism in exploring new market opportunities and its commitment to transforming the lives of its customers and partners, creating economic and social value.

In conjunction with this initiative, the bank has initiated a program called “Sustainability Journey” to integrate its business strategy with sustainable practices, enhancing profitability while reaffirming its commitment to national development.

With the addition of BFA Pensões, Angola now has nine entities in the pension sector, including four insurance companies and five fund managers. ARSEG data reveals that only a small fraction of the two million employees registered with the National Social Security Institute (INSS) have subscribed to complementary pension packages. This scenario presents a significant business opportunity, considering the large number of predominantly young employees not yet part of the pension system.

As of December 31, 2022, ARSEG reported eight pension fund management entities overseeing 37 funds, 28 of which were closed. The total value of pension funds grew by 39% to Akz 835 billion (US $996.53 million), with closed-end funds representing 97% of this value. Pension funds, largely invested in Treasury Bonds, have become a crucial part of Angola’s national economy.