2024-06



Issued June 2024

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In this newsletter...
	Benchtest 05.2024 – making hay, the NPF looms, planning your retirement, housing loan risks, unpaid contributions in multi-employer funds and more...

Jump to...
	Important notes & reminders In this newsletter... Tilman Friedrich's industry forum Compliments Benchmark: a note from Günter Pfeifer News from RFS	News from NAMFISA News from RFIN Legal snippets Snippets for the pension fund industry Snippets of general interest And finally...


IMPORTANT NOTES AND REMINDERS

	NAMFISA levies Funds with June 2024 year-ends must submit their 2nd levy returns and payments by 25 July 2024; Funds with December 2024 year-ends must submit their 1st levy returns and payments by 25 July 2024; and funds with June 2023 year-ends must submit their final levy returns and payments by 30 June 2024. Repo rate unchanged in June BON announced after its June meeting that the repo rate remains unchanged at 7.75%. The interest rate on funds’ direct loans remains at 11.75%. Registered service providers Certain pension fund service providers must register with NAMFISA and report to NAMFISA. Download a list of service providers registered as of June 2023, here...	Retirement calculator Use our web-based retirement and risk shortfall calculator for your personal retirement planning. Find it here... If you need help with your financial planning, get in touch with Annemarie Nel (tel 061-446 073) Christina Linge (061-446 075) Toolbox for trustees RFS provides comprehensive support for trustees. Find a list of download documents to assist with governance and management of private funds, registered as of June 2023, here...


IN THIS NEWSLETTER...

	In this newsletter, we address the following topics:

	In 'Tilman Friedrich's industry forum' we present... Monthly review of portfolio performance – 31 May 2024 Should you still try to make hay while the sun shines? MLIREC bulldozes ILO’s NPF model Planning your retirement Pension-backed housing loans are risky business Multi-employer funds and the risk of unpaid contributions In Compliments, read... A compliment from a former member In ‘Benchmark: a note from Günter Pfeifer’, read about… Welcoming Namibia Breweries to the Benchmark Retirement Fund In 'News from RFS', read about... The Retirement Compass In 'News from NAMFISA', read about... Name reservations and ERS access applications In 'News from RFIN', read about... The RFIN training calendar RFIN submits comments on Outsourcing standard	In 'Legal snippets', read about... ·SA Adjudicator determination: Prinsloo vs. Metal Industries Provident Fund and Global Engineering Worx In 'Snippets for the pension funds industry,' read about... The retirement curse and how to avoid it Five key considerations for your offshore investment strategy In ‘Snippets of general interest', read about... The benefits of building new leaders internally Blackrock CEO - AIs’ hunger for electricity offers investment opportunities And make a point of reading what our clients say about us in the ‘Compliments’ section. It should give you a good appreciation of who and what we are! As always, your comment is welcome, so open a new mail and drop us a note! Regards Tilman Friedrich


TILMAN FRIEDRICH'S INDUSTRY FORUM

Monthly Review of Portfolio Performance to 31 May 2024

	In May 2024, the average prudential balanced portfolio returned 1.2% (April 2024: 1.0%). The top performer is Allan Gray Balanced Fund, with 1.7%, while Lebela Balanced Fund, with 0.7%, takes the bottom spot. NinetyOne Managed Fund took the top spot for the three months, outperforming the ‘average’ by roughly 0.8%. Lebela Balanced Fund underperformed the ‘average’ by 1.0% on the other end of the scale. The Monthly Review of Portfolio Performance to 31 May 2024 reviews portfolio performances and provides insightful analyses. Download it here...

Should you still try to make hay while the sun shines

	Would you invest in Europe or the US if you knew that Russia would launch missiles armed with nuclear warheads tomorrow? It is perhaps a hypothetical question now but closer to reality than most people might think. When we think of investing, we think of Europe, the US and Japan. Every other destination would only be considered hesitantly. Pension fund asset managers’ asset allocation reflects the same thinking. Besides their compulsory domestic exposure, most of their funds are invested in Europe, the US and Japan. The investment in other markets is usually well below 10%. I have never seen any Chinese, Indian or Turkish share in their top ten. It is a bit of herd mentality aimed at protecting their interests. They do not want to be the tallest poppy getting its head chopped off. The West is facing a severe threat to its economic system that dominates the global economy. As a result, many prominent commentators agree that World War III is already raging in Ukraine and now the Middle East. Europe is not ready to enter the war yet. Europe is propping up Ukraine while it gears up to join the war with all its resources. In the meantime, it will push ever more resources into Ukraine, hoping it will last long enough until Europe is ready. Will Russia afford Europe the time to prepare? It is inconceivable as it would drastically weaken Russia’s chances of surviving. As things stand, Russia’s best bet is to overrun Ukraine before Europe is ready to engage it. However, Russia is facing a dilemma… Read paragraph 6 of the Monthly Review of Portfolio Performance to 31 May 2024. It also reviews portfolio performances and provides insightful analyses. Download the Monthly Review of Portfolio Performance to 31 May 2024, here...

Employers and Labour take note: MLIREC bulldozes ILO’s NPF model!

	What is the purpose of our so-called tripartite model to social security when the government, through the Ministry of Labour, Industrial Relations and Labour Creation, ignores the results of a long consultative process on a model for a National Pension Fund for Namibia? All the time and money invested by the SSC, Labour and Employer organisations have been wasted. The waste of resources is very disappointing, as is the fact that the SSC is now trying to blame the NEF for not responding by the due date for comments. Factually, MLIREC has long made up its mind about the ILO design and has no interest in SSC’s proposed design. There was no MLIREC representative at the meeting called by SSC to present their model during September 2023. Yes, the NEF was requested after the SCC presentation to express its preference between the two. The problem was that, in terms of fairness to its members, the NEF needed more time to consult with them. The NEF informed the SSC that it could not comment by the requested date. The SSC indicated that it was going to wait for the NEF. The NEF followed up its verbal communication with a short letter before the SSC communicated a new deadline. However, before the NEF could provide its formal response, rumours were already circulating early this year about the meeting held in December between the SSC and the MLIREC about its decision in favour of the ILO model. A letter of 13 June from the SSC to the NEF states, “We are pleased to invite you as our valued stakeholder to participate in an engagement with the Social Security Commission, scheduled for 24 June 2024, from 08h30 - 13h00 at AVANI Hotel in Windhoek, to discuss and seek clarification on the SSC’s implementation of the National Pension Fund (NPF)… Given the above, the SSC once more seek your audience to obtain relevant input, comments and guidance as we navigate the NPF Journey. This workshop with the NEF has the following objectives : To present again to you the critical aspects of the NPF Design, Governance and Implementation to provide clarifications and seek your comments and input; To share the draft Roadmap for the implementation of the NPF; To identify implementation issues and receive guidance on stakeholder priorities for the next phase. Inviting someone “…to discuss and seek clarification…” when the invitee’s inputs and opinions were already rejected is a bit like adding insult to injury. Employers and Labour are urged to mobilise resources and make their voices heard. Interested persons should find our commentaries in previous newsletters helpful. Benchtest 07.2023, which you will find in the Editor’s column here… Benchtest 02.2024, which you will find in the Editor’s column here…

Planning your retirement

	Most people approaching retirement do not know where and how to start planning for retirement. Planning for retirement probably requires the retiree to make some of the most intimidating decisions in his life. What is worse, some of the decisions cannot be ‘rolled back’ again, and the pensioner will have to live with them for the rest of his life. Here are a few practical guidelines for your retirement: Firstly, determine your household’s monthly cash flow surplus or shortfall based on your assets and liabilities and your cost of living before considering how to invest your available capital. It requires the following: a) Prepare a detailed monthly budget of your typical cost of living and other ongoing monthly obligations and provide for any other exceptional or irregular costs such as known repairs and maintenance to your residence, your holiday house, motor vehicles, machinery and equipment, holidays and medical expenses that you may have to carry over and above what is covered by your medical aid. b) Determine your expected income from any other investment or pension after providing for income tax. c) The difference between 1a) and 1b) will reflect either a shortfall or a surplus before the prospective pension income you will earn from your retirement capital. d) If the difference per 1c) is a surplus, you can be more flexible regarding investing your available capital. If the difference per 1c) is a shortfall, your focus should be investing your available capital to provide a stable monthly income covering as much of your regular expenses as possible. It may also require you to reconsider your budget per 1a) to reduce your cost of living. Secondly, having determined your cash flow position as per 1c), you now need to decide how to invest your available capital. a) In case of a surplus per 1c), you can invest your discretionary capital (cash from your retirement fund and any other capital you may still have available for investment) more aggressively to achieve higher investment returns. b) In case of a shortfall per 1c), you need to invest your discretionary capital (cash from your retirement fund and any other capital you may still have available for investment) more cautiously to secure a stable monthly income. c) Ideally, you should have funds that are readily accessible (money market, savings, call deposit, etc.) to cover your expenses in 1a) for at least the next 6 to 12 months. Alternatively, if your mortgage bond would allow you to take up money again without a significant effort, in case of an emergency, your one-third portion from your retirement fund can be used to repay the outstanding balance on the mortgage bond. Paying back a mortgage bond with a one-third pay-out from a pension or retirement annuity fund (untaxed) is a sound investment decision, provided you can draw on that bond again in an emergency as per 2c). Having your total provident fund capital paid out (where you are a provident fund member) to be reinvested is usually not a sound investment decision. First, you will be taxed on two-thirds of the benefit. You need to invest the balance elsewhere after tax has been deducted. It will be challenging to achieve a return on such an investment when you consider the lost tax. You would typically incur initial and ongoing fees on such investment or would sacrifice investment returns. That would not be the case if you retained your capital in the retirement fund to receive a monthly pension. The above exposition should indicate the required information before considering how to deal with your pension or provident fund retirement capital. Where you are allowed to switch to another investment portfolio in anticipation of your retirement, mainly for the sake of protecting your retirement capital, your decision should be based on the following considerations: Investing in a volatile market portfolio can produce negative returns depending on the investment environment and short-term investor sentiment. Are there any prevailing political or economic uncertainties that pose a risk of investment markets declining over the next year or two and requiring you to protect that part of your retirement capital that you intend to withdraw in cash? Suppose you are planning to retire within the next 36 months. In that case, your investment horizon regarding your retirement capital is short-term, at least until you have concluded the above process, and you should avoid the risk of negative returns of any retirement capital you intend to withdraw by switching to a lower-risk portfolio. You do not need to be concerned about any portion of your retirement capital you intend to convert to a monthly annuity or pension. It will cost you less to buy the annuity for less should the market have turned negative just before your retirement, or vice-versa. If you can choose to switch to a guaranteed (or smooth bonus or absolute growth) portfolio, you will not run the risk of negative investment returns until you retire.


Pension-backed housing loans are risky business

	Pension-backed housing loans offered by commercial banks are based on an agreement between the bank, the fund and the employer. The primary responsibilities of the parties are as follows: The employer is required to assist the employee in completing the documentation required by the bank; ascertain that the application is consistent with section 19(5) of the Pension Funds Act; deduct the monthly loan repayment from the employee’s salary; pay over to the bank its employees’ monthly loan repayments; Inform the bank of the termination of the employee’s service. The bank is required to ascertain the affordability of the loan to the employee; disburse the loan amount approved; account for interest and loan repayments. The fund is required to ascertain that the loan applied for does not exceed the maximum loan as agreed between the parties; record the fact that the member has taken a loan on the member’s record; obtain the outstanding loan balance from the bank at the member’s date of exit when it is informed of the member’s exit from the fund; pay the outstanding loan balance to the bank upon a member’s exit. Since pension funds typically outsource the administration of their fund, the fund’s obligations in terms of the agreement with the bank and the employer will have to be transferred to the fund’s administrator. The meticulous reader might already have realised from the above exposition that the fund is obliged to repay the outstanding loan balance to the bank. But what if there is a shortfall between the amount refunded to the bank and the member’s available capital? There are a few reasons for a possible shortfall, such as negative returns on the pension fund investment, arrears tax deducted from the benefit or the benefit being paid out without deducting the outstanding housing loan. The fund bears this risk! There can be several reasons for the failure to have deducted the outstanding housing loan balance from the member’s benefit. The member record may not have shown this member to have had a loan. Since such entry on a member’s record is not the result of the fund’s book entry, it is utterly dependent on manual intervention. A member’s details may have changed, either through marriage or because the member has two different identity documents, which is not unusual, or the fund incorrectly recorded the identification number allocated by the bank. Another risk often overlooked in ignorance of the legal prerequisites is that the Labour Act is pretty prescriptive and restrictive regarding when an employer may make deductions from an employee’s salary and how much it may deduct if anything. Thus, The fund may happily agree with the bank and the employer only to find that the employer is legally prevented from making the required deductions from members’ salaries. If the fund incurred a loss because of a shortfall between the outstanding loan balance it was required to pay over to the bank and the available capital, the fund would have to attempt to recover the shortfall from the exited member. The prospect of success then depends on the fund’s agreement with the member and what recourse it offers the fund for such an instance. In our experience, funds mostly do not enter into a separate agreement with their members who borrow for housing purposes and rely on the documents the bank has compiled regarding the housing loan scheme. These documents are typically only concerned about the bank’s interests and offer little respite to the fund. Banks have also not been accommodating in considering requests to better protect the funds’ interests. Funds that grant pension-backed housing loans are advised to ascertain that repayment deductions are permissible in terms of the Labour Act and to consider entering into a separate agreement with borrowers that will afford funds the necessary recourse in the event of a member or former member not repaying the outstanding housing loan balance.


Multi-employer funds and the risk of unpaid contributions

	The column ‘legal snippets’ article deals with unpaid employer contributions and how they affect the member’s benefit. How unpaid contributions jeopardise a member’s benefits is relevant to multi-employer funds. Such funds face risk in the case of delinquent employers if their rules do not consider unpaid contributions. In the case reported below, the Adjudicator instructed the fund to pay the fund credit immediately, as well as the outstanding employer contributions once received. The Adjudicator did not address the situation of the employer failing to pay the unpaid contributions. It implies that the fund would not pay the outstanding contributions if it did not receive them. The rules of most occupational funds, as the Adjudicator also insinuates in this case, provide that the main portion of the member’s benefit would always comprise his fund credit. The definition of fund credit would primarily determine that it will consist of the ‘retirement portion’ of the employer’s contributions, the member’s contributions and the interest allocated. In most cases, contributions are a function of the member’s ‘pensionable’ salary. As long as the member is employed, he will earn a pensionable salary, and the fund must build up the fund credit independently of whether the contributions were paid. The fund credit should, thus, comprise all contributions payable under the rules. The benefit, therefore, cannot be reduced by outstanding contributions, as underscored by section 37A of the PFA. In the reported case, the Adjudicator did not enter the details addressed in this article. With the information, I suggest that the determination is incorrect unless the Adjudicator knew that the definition of fund credit excludes unpaid contributions without referring to it in her determination. In the case of an umbrella retirement fund comprising unrelated employers, the fund faces the risk of paying the fund credit without receiving all prescribed contributions. Such umbrella funds must ascertain that their rules define the fund credit as comprising only contributions received (rather than receivable) plus interest. I believe a rule that reduces the fund credit by unpaid contributions would contravene section 37A and be null and void. An umbrella fund comprising multiple employers within one group of companies is mostly not exposed to the above risk as the holding company would stand for a delinquent group company. However, where this is not the case, the fund’s rules should also ensure that the fund credit is built up only with contributions received (rather than receivable).


COMPLIMENT

	Compliment from a former member November 2023	“L I wanted to take a moment to express my sincere gratitude for the exceptional service that you and C, and the rest of the team provided. Your dedication, attention to detail, and unwavering commitment to excellence set you apart. It’s rare to encounter such outstanding professionalism, and I am truly grateful for the positive impact you ladies had. Thank you once again for your exceptional service. It has been a pleasure working with you all, and I look forward to the opportunity to do so again in the future.”

	Read more comments from our clients, here...


BENCHMARK: A NOTE FROM GÜNTER PFEIFER

Welcoming Namibia Breweries to the Benchmark Retirement Fund

	We are delighted to announce that Namibia Breweries has joined the Benchmark Retirement Fund, further solidifying our commitment to providing top-tier retirement solutions. Established in 2000, our fund has grown to serve 19,000 members and manage assets worth N$9 billion, a testament to the trust placed in us by employers, pensioners, and individuals preserving their capital. As Namibia’s largest umbrella fund and the second largest fund overall, following the GIPF, we take immense pride in being Namibia’s preferred choice for retirement benefits. Namibia Breweries’ decision to become part of our fund underscores our reputation for excellence and dedication to supporting our employers’ and their employees’ long-term financial security. We warmly welcome the employees of Namibia Breweries to our community. Your inclusion enriches our collective strength and diversity. We are committed to providing exceptional service, the best pension expertise, and industry-leading solutions to help you achieve your retirement goals. We thank Namibia Breweries for choosing the Benchmark Retirement Fund. We look forward to a prosperous and rewarding partnership.

Important circulars issued by the Fund

	The Benchmark Retirement Fund issued no new circular since the previous newsletter 202309 – changes to survivor annuity investments. Clients are welcome to contact us if they require a copy of any circular.


NEWS FROM RFS

The RETIREMENT COMPASS

	Read the quarter 1, 2024 Retirement Compass here...

Important circulars issued by RFS

	RFS issued no circulars after circular RFS 2024.05-03 – Administration System Progress Update. Clients are welcome to contact us if they require a copy of any circular.


NEWS FROM NAMFISA

Name reservations and ERS access applications

	NAMFISA advised stakeholders who wish to apply for a name reservation or online access to the ERS system that it operates a dedicated mailbox for these purposes and that such applications must be sent to any of the following email addresses: This email address is being protected from spambots. You need JavaScript enabled to view it. This email address is being protected from spambots. You need JavaScript enabled to view it. This email address is being protected from spambots. You need JavaScript enabled to view it. An application for ERS access must be accompanied by the required form. Download it here…


News from RFIN

RFIN submits comments on outsourcing standard

	RFIN submitted commentary on the standard Gen.S.10.10 regarding outsourcing services, as discussed in the three sessions at NAMFISA, in time for the closing date. Download the comments here…

RFIN’s trustee training calendar

	The RFIN website is a valuable resource for pension fund trustees and other industry stakeholders. It would be worth your while rummaging around on it here… If you missed the RFIN’s latest quarterly newsletter, download it here...


LEGAL SNIPPETS

SA Adjudicator determination: Prinsloo vs. Metal Industries Provident Fund and Global Engineering Worx

	Introduction to the Case This article discusses an adjudicator’s determination regarding the failure of an employer to remit provident fund contributions to an employee. The determination was made under Section 30M of the SA Pension Funds Act, 24 of 1956. The parties involved are the complainant, PG Prinsloo, the Metal Industries Provident Fund, and the employer, Global Engineering Worx (Pty) Ltd. Background Employment Period: The complainant was employed by the employer from 1 August 2018 to 20 May 2022 and was a member of the provident fund due to this employment. Complaint: Prinsloo’s complaint, received on 8 December 2021, centred on the employer’s failure to pay all required provident fund contributions. Despite deductions from his salary, the contributions were not consistently remitted to the fund. Procedural History Notifications and responses were exchanged between the Adjudicator, the complainant, the fund, and the employer from December 2021 to April 2022. The Adjudicator determined it unnecessary to hold a hearing, deciding the matter based on written submissions, as the employer did not respond to the Adjudicator’s request regarding the complaint. Factual Background Contributions Record: The fund received contributions for the complainant from August 2018 to December 2019 and May 2020 to June 2020. Contributions were missing from January 2020 to April 2020 and July 2020 onwards. Outstanding Contributions: The fund calculated that the employer owed R133,398.40 for unpaid contributions from July 2020 to December 2021 and April 2022. Legal Framework and Issues Ultra Vires Doctrine: The Supreme Court of Appeal’s decision in Municipal Employees Pension Fund v Mongwaketse reaffirmed that fund rules are binding and actions beyond these rules are null and void. Payment of Contributions: The fund’s rules and Section 13A of the Pension Funds Act mandate timely contributions from employers. Contributions must be paid within seven days after the month for which they are due. Determination and Reasons Employer’s Failure: The employer was found in breach of its duty to pay provident fund contributions, violating Section 13A of the Act and the fund’s rules. Interest on Late Payments: The fund must calculate and notify the employer of the interest on late payments as required by Section 13A(7). [Editor’s Note: Namibia’s PFA does not have an equivalent provision.] Employer’s Duties: The employer must pay the outstanding contributions plus interest within six weeks. Claim Submission: The complainant is instructed to submit his withdrawal claim form directly to the fund, which must be accepted without the employer’s stamp or signature. Relief Granted Interest Calculation: The fund must calculate the late payment interest and notify the employer within four weeks. Outstanding Contributions Payment: The employer must pay R133,398.40 plus late payment interest within six weeks. Withdrawal Claim Processing: The complainant must submit his claim form to the fund, which must process the withdrawal without the employer’s stamp. Benefit Payment: The fund must pay the complainant the current fund credit. Once the employer paid its outstanding contributions, it must pay these, minus allowable deductions, within specified timeframes. Information Disclosure: The fund must provide a breakdown of the withdrawal benefit paid. Conclusion This case highlights the critical obligations of employers to remit pension contributions promptly and the protections afforded to employees under the Pension Funds Act. It underscores the importance of adherence to fund rules and statutory provisions to safeguard employees’ retirement benefits. This determination not only resolves the individual complaint of Mr Prinsloo but also reinforces the mechanisms for enforcing employer compliance within the pension fund system. Read the determination here…


SNIPPETS FOR THE PENSION FUND INDUSTRY

The retirement curse and how to avoid it

	This article explores whether retirement can lead to adverse health and well-being outcomes if not managed properly. Known as the “retirement curse,” this phenomenon includes both physical and mental health declines, such as increased risks of heart disease, stroke, dementia, and mental illness, which are partly attributed to the abrupt lifestyle changes retirement brings. Key Points: Expectation vs. Reality: Retirement is expected to be a period of freedom and enjoyment, but it can lead to serious health problems if not approached correctly. Health Impact: Research by Dhaval Dave indicates a notable decline in mental and physical health around five years after retirement. Economic Strain: Increased chronic health conditions in retirees strain government healthcare programs. Importance of Transition: Transitioning from work to retirement requires careful handling to maintain well-being. Maintaining Routines: Establishing new routines and staying socially active are crucial to avoiding loneliness and maintaining mental health. Gradual Transition: Gradually reducing work hours and finding new activities can help ease into retirement. Healthy Habits: Maintaining a healthy diet and regular physical activity is essential. Social Connections: Regular interactions with family, friends, or pets can provide companionship and purpose. Couples: Couples should address potential challenges together and set boundaries to avoid conflicts. Activities and Volunteering: Engaging in part-time work, consulting, volunteering, or studying can provide purpose and structure. Unretirement: Many retirees return to work to regain a sense of purpose, social interaction, and mental stimulation. Avoiding the Curse: Plan financially and socially for an active lifestyle. Ease into retirement gradually. Keep a healthy diet and exercise routine. Foster strong social connections and purposeful activities. Consider part-time work, volunteering, or further education. By proactively managing the transition into retirement and maintaining an active, socially connected, and purposeful lifestyle, individuals can avoid the negative aspects of the “retirement curse” and enjoy a fulfilling retirement. Download the full article from Stories by Stars Insider of 30 May 2024 here…

Five key considerations for your offshore investment strategy

	This article outlines essential considerations for South African investors aiming for long-term wealth creation through offshore investments. These considerations are: Investment Instrument: Choose the appropriate investment instrument, such as US technology shares, ETFs, unit trusts, or global property investments. Diversification across various instruments and markets is crucial. Investment Objective: Understand the objective behind the investment, focusing on wealth preservation against currency depreciation and viewing investments from a global perspective. Governance and Compliance: Be aware of the governance and compliance requirements, as seen with Russia’s sanctions and South Africa’s greylisting, which increase compliance costs and administrative burdens. Investment Platform: Decide whether to use the direct route for offshore investments or an asset swap arrangement, noting that specialist advice may be required for the latter. Advice and Fees: Consider the value of expert advice for navigating compliance, tax structuring, and obtaining independent perspectives despite the availability of do-it-yourself investment platforms. By incorporating these considerations, investors can make informed decisions and potentially improve their long-term investment outcomes. Read the article by Maarten Ackerman of Citadel in Cover Web Magazine, May 2024 edition, here…


SNIPPETS OF GENERAL INTEREST

The benefits of building new leaders internally

	Greg Lewis and Jamila Smith-Dell of LinkedIn highlight the advantages of promoting new organisational leaders. Key findings from LinkedIn data reveal several benefits for companies that cultivate internal leadership: Retention, Promotion, and Learning: Companies that frequently promote from within see: 1.9 times longer employee tenure. 2.6 times higher promotion rates. 1.9 times greater learner engagement on LinkedIn Learning. A culture of internal promotion encourages employees to stay longer, advance, and continuously develop new skills. Skills Development: Common skills developed by new leaders before promotion include management, sales, customer service, project management, leadership, and teamwork. These skills suggest qualities such as emotional intelligence, motivation, and the ability to manage cross-functional teams. Geographical and Industry Trends: Internal leadership development is slightly higher in North America and EMEA (43%) compared to the global average (42%) but lower in Latin America (38%) and Asia-Pacific (37%). Countries with the highest internal promotion rates include Poland (56%), Germany (52%), Austria (52%), and Japan (50%). Industries with high internal promotion rates are financial services, manufacturing, oil, gas, mining, wholesale, and utilities, which value institutional knowledge and technical expertise. Lower rates of internal leadership development are seen in accommodation and food service (34%) and retail (40%). Conclusion: Nurturing new leaders within the business provides significant benefits, fostering a culture where employees feel they can thrive and progress. Employers who promote from within gain new leaders and enhance employee engagement and loyalty. If you are on LinkedIn, read the article here…

Blackrock CEO - AIs’ hunger for electricity offers investment opportunities

	ROME, 17 May (Reuters) - The infrastructure for the vast and increasing electricity demand of artificial intelligence (AI) will require the involvement of private investors, according to BlackRock CEO Larry Fink. “These AI data centres will require more energy than we could ever have imagined,” Fink said on Friday via video link at the meeting of the B7 economic group in Rome. “We don’t have enough electricity in the G7,” he added, referring to the top seven industrialised countries (G7), whose finance ministers will meet next week. “Trillions of dollars” would be needed. Such investments are opportunities for pension funds and insurance companies. According to Fink, Blackrock talks with various governments about financing opportunities to expand AI. The power supply is the most urgent issue. “This will pose a real competitive challenge for the states,” he continued. Presumably, data centres would be built where the power supply is cheaper. Power supply will require government subsidies for areas where energy costs are not competitive. “The deficits we see in the G7 are becoming a burden for my children, your children, our grandchildren.” With the rise of AI technology comes the hope of a global productivity boost. However, this requires data centres and semiconductor plants, which consume enormous amounts of electricity. Japan predicted earlier this week that between 35 and 50 per cent more electricity would have to be produced by 2050 to power the AI industry’s chip factories and data centres. According to a government report, up to 1.5 trillion kilowatt hours (kWh) would have to be produced. Meeting the increasing demand must be achieved by restarting nuclear power plants, novel solar modules with perovskite technology and wind farms at sea. (Reporting by Valentina Za, writing by Scot W. Stevenson) Read the article here...


AND FINALLY...

Wise words from wise men The insights of ancient philosophers still resonate today and offer timeless wisdom on the relationship between money, virtue, and well-being.

	"The Master said, “Wealth and honor are things that all people desire, and yet unless they are acquired in the proper way I will not abide them. Poverty and disgrace are things that all people hate, and yet unless they are avoided in the proper way, I will not despise them.” ~ Confucius (551 BC – 479 BC)


	Unsubscribe If you do not want to receive these newsletters {unsubscribe}click here...{/unsubscribe} Disclaimer Whilst we have taken all reasonable measures to ensure that the results reflected herein are correct, Benchmark Retirement Fund and RFS Fund Administrators (Pty) Ltd do not accept any liability for the accuracy of the information and no decision should be taken on the basis of the information contained herein before confirming the detail with the relevant portfolio manager.