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Benchtest Newsletter
Issued August 2022
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In this newsletter
Benchtest 07.2022 – Will employers discard retirement funds? An industry in legal jeopardy and more...
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Jump to...
Important notes & reminders
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Repo rate up to 5.5%
The Bank of Namibia announced an increase of the repo rate to 5.5% from 17 August. The interest rate for direct loans will increase accordingly to 9.5% from 1 September.
NAMFISA levies
- Funds with July 2021 year-ends must submit their 2nd levy returns and payments by 25 August 2022;
- Funds with January 2021 year-ends must submit their 1st levy returns and payments by 25 August 2022; and
- Funds with August 2021 year-ends must submit their final levy returns and payments by 31 August 2022.
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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)
- Kristof Lerch (tel 061-446 042)
- Christina Linge (061-446 6075)
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 2022, here...
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Newsletter
In this newsletter, we address the following topics:
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In 'Tilman Friedrich's industry forum' we present...
- Monthly review of portfolio performance – 31 July 2022
- The FIMA – will it lead to an exodus of employers?
- The FIMA – an industry at the mercy of NAMFISA
- NAMFISA public notice on pension backed housing loans and guarantees
- Does your fund use your company’s logo
- Thinking of moving assets between managers?
In 'Benchmark – a note from Günter Pfeifer' read about...
- Important circulars issued by the Fund
In 'News from RFS' read about…
- RFS celebrates its 23rd birthday
- Important circulars issued by RFS
In 'A note from !Kharos' read about...
- Applause for a job well done!
- Leave your payroll management to the experts
In 'News from NAMFISA' read about...
- Notes of NAMIFSA industry meeting
- NAMFISA summary of industry comments on standards and regulation
- NAMFISA flags five entities for possible risk to financial sector
- Guidance note on FIMA fund re-registration
- NAMFISA focusing on amending the FIMA
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In 'Legal snippets,' read about...
- Can you request that your death benefit be paid into your testamentary trust?
- Death benefits and S 37C, when do you have to pay
In 'Snippets for the pension funds industry,' read about...
- Five ways employers can help employees prepare for a better retirement
- Ten things you might spend more on in retirement
In ‘Snippets of general interest', read about...
- 26 universities in South Africa listed in new global ranking
- Best and worst South African universities to become a CA
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
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 Tilman Friedrich's industry forum
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Monthly Review of Portfolio Performance
to 31 July 2022
In July 2022, the average prudential balanced portfolio returned 2.9% (June 2022: -3.7%). The top performer is Stanlib Managed Fund with 4.0%, while Allan Gray Balanced Fund with 2.0% takes the bottom spot. For the 3-months Allan Gray Balanced Fund takes the top spot, outperforming the 'average' by roughly 1.2%. Momentum Namibia Growth Fund underperformed the 'average' by 1.9% on the other end of the scale. Note that these returns are before (gross of) asset management fees. The Monthly Review of Portfolio Performance to 31 July 2022 provides a full review of portfolio performances and other insightful analyses. Download it here...
We are all in the hands of the Fed
The investor cannot foresee any new crisis hitting financial markets nor how and when the Fed will respond to it. Chopping and changing one’s investment portfolio in response to what happened in the markets, stands a good chance of wrong timing. Investing is a long-term game. Saving is a short-term game. One must have a long-term strategy for one’s investments. One may change one’s investment strategy in response to changing personal circumstances and apply short-term tactical measures in the transition process. One should not employ short-term tactical measures to respond to what happened in the markets. The typical prudential balanced portfolio is an ideal vehicle for the long-term investor. It comprises of all the main asset classes and is managed pro-actively based on prevailing and expected market- and economic conditions.
The Monthly Review of Portfolio Performance to 31 July 2022 also reflects the editor’s views on current developments and their impact on investment markets. Download it here...
The FIMA – will it lead to an exodus of employers?
Employers are not obliged to provide retirement benefits to their employees. While the Income Tax Act offers tax incentives for the participation in a retirement fund, these incentives all benefit the employee. The employer may deduct all expenditure it incurs in the production of income and a retirement fund offers nothing special to the employer from a tax perspective.
In the ‘good old days’ we learnt in our studies that retirement funds offered two critical benefits to employers. Firstly, it allowed the employer to structure their funds in a way to improve their chances of attracting and retaining skills in a competitive labour market. Secondly, it allowed employers to fulfil their moral obligations towards their staff in a life event such as death, disability, or retirement consistent with its business philosophy. These benefits undoubtedly lead to the growth of the retirement funds industry over the years and there is hardly an employer who does not offer retirement fund benefits to its employees. If employers had left it to their employees to make their own arrangements, the retirement funds industry today would be a fraction of its size. It would not be as vibrant, competitive, and efficient as it is today! Today the retirement funds industry is by far the largest custodian of the wealth of Namibian citizens and provider of development capital to the economy.
Will the industry retain this position and role in the economy? Over the past number of years NAMFISA has increasingly restricted the influence and role of the employer in the provision of retirement benefits to their employees. Today employers find it difficult to still realise their two main objectives for providing retirement benefits. The FIMA not only entrenches the ‘anti-employer’ philosophy, it also introduces serious risks for employers, raises the costs of providing for retirement and reduces the outcome for the employee significantly!
We know that employers are increasingly questioning the value and purpose of their retirement funds and are concerned that the FIMA may cause unintended consequence to the detriment of employees and their dependants.
Considering that the FIMA implementation was postponed and that NAMFISA indicated it will focus on having FIMA amendments passed by parliament, it offers the opportunity to reconsider the FIMA’s stance towards employers.
The FIMA places an industry in legal jeopardy
The FIMA, which is complemented by 14 general standards, 24 industry standards and 8 industry regulations relevant to retirement funds contains more than 600 compliance requirements. And there are more standards and regulations to come!
It is inconceivable that any fund or any board of trustees will not be found wanting on numerous compliance requirements with every inspection! The same applies to service providers.
To use a simplistic analogy: the FIMA requires Grade 1’s to pass Grade 12 exams and if they don’t, they may get punished with up to 5 years in jail and up to a N$ 10 million penalty.
The consequence of this state-of-affairs is that every fund and every trustee, in fact the whole industry will be in legal jeopardy.
NAMFISA public notice on pension backed housing loans and guarantees
On 29 July, NAMFISA published a public notice on pension backed housing loans and guarantees. In the notice NAMFISA informed the public “…that Section 19(5) of the Pension Funds Act, 1956 (Act No. 24 of 1956) (“the Pension Funds Act”) makes provision for pension funds to directly lend members a portion of their pension fund savings to buy immovable property or to make renovations to existing immovable property. In addition, the Pension Funds Act allows pension funds to furnish pension-backed guarantees to persons providing housing loans to its members for the same purpose.”
It is not clear why NAMFISA published this notice, as funds whose rules provide for housing loans and guarantees mostly do offer such loans or guarantees. Perhaps it was to divert the public’s attention from the ill-fated compulsory preservation regulation.
The unfortunate consequence of the notice was that many fund members saw this as their justification to demand loans from their funds. They conveniently only read the part of the notice that suits their desires and overlooked the part that referred to the rules needing to provide for such loans and guarantees.
Does your fund use your company’s logo?
It is common practice that funds would use their sponsoring employer’s logo for all their communications. Often the company logo is registered and is protected under the Business and Industrial Property Act.
Retirement funds are separate legal entities that only have a business relationship with their sponsoring employer. If the employer registered its logo, its use by the fund would infringe the employer’s registered rights to its logo and this could present a risk to the employer. It may mislead the public doing business with the employer or the fund into thinking they are doing business with the other entity. It could also present the opportunity to play off the two institutions against each other to their advantage.
It is therefore advisable that funds at least obtain formal approval for the use of the employer’s logo but preferably, funds should use their own logo.
Thinking of moving assets between managers?
Much can go wrong at the expense of your fund when moving assets between managers, of which you may never be aware. If you do contemplate shifting assets, consider engaging specialist ‘transition management’. What is ‘transition management’ you may ask? Well, it is a specialist service offered to funds that want to transfer asset from one manager to another manager.
Whenever your fund contemplates a significant restructuring of its investments, our best advice is to consider employing a transition manager. The minimum transaction such specialists would typically consider is a transfer of N$ 50 million plus. Their fees for such a service typically come out of them earning brokerage on any buy and sell deals that will need to be made in the process. Effectively it would not cost the fund anything extra. The process provides full transparencyand ensures that all income accruing to the fund during the transition phase is properly accounted. With cum and ex div, it is often not so easy.
Tilman Friedrich is a chartered accountant and a Namibian Certified Financial Planner® practitioner, specialising in the pensions field. He is co-founder, shareholder, and Chairman of the RFS Board and retired chairperson, and now a trustee of the Benchmark Retirement Fund.
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Compliment
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Compliment from a mayor
Dated 28 July 2022
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“I'm Mr. I… K… the mayor of … Town and the Head of Natis testing center in …., on the 28th July 2022 around 15h00 I visited your office, I was so surprised about the warm atmosphere towards customers service, by your staff in the likes of:
- L… B…
- J… R…
- T… H…
I'm so impressed for this kind of service, keep it up shinning and be an example to others institutions which render those services, you will never lose anything, this was the core customer service I ever received in this country.” |
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Read more comments from our clients here...
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Benchmark: a note from Günter Pfeifer
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Important circulars issued by the Fund
The Benchmark Retirement Fund issued the following circular. Clients are welcome to contact us if they require a copy of any circular.
- 202206 – Postponement of the FIMA
Günter Pfeifer holds a Bachelor of Commerce (Cum Laude). He completed his articles with Deloitte & Touche. He completed the De Beers ‘Program For Management Development’ at Gordon Institute for Business Science, and the Advanced Development Program at the London Business School. He was formerly Financial Manager of De Beers Marine.
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News from RFS
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RFS celebrates its 23rd anniversary
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The registrar of companies registered Retirement Fund Solutions Namibia (Pty) LTD on 19 August 1999. At the time Alexander Forbes had just acquired United Pension Administrators (Pty) Ltd (UPA) and was about to establish itself as the only private fund administrator in Namibia. RFS’ founders, Mark Gustafsson and Tilman Friedrich saw this threat and decided to establish a new private fund administrator, building on the business philosophy of UPA and offering Namibian retirement funds a local alternative.
With their 10-year plus track record at the time, it did not take Mark and Tilman long to get the snowball rolling and to overtake its biggest competitor in some areas. The table below illustrates the success RFS achieved over the past 23 years.
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2004 |
2009 |
2019 |
2021 |
* Market Estimate |
Market Share |
| Members – 3rd party |
8,000 |
21,000 |
24,700 |
26,300 |
54,100 |
48% |
| Members – Umbrella funds |
1,300 |
3,700 |
9,700 |
12,600 |
90,800 |
14% |
| Assets (N$ m) – 3rd party |
1,300 |
6,000 |
14,000 |
19,400 |
28,600 |
68% |
| Assets (N$ m) – Umbrella funds |
60 |
212 |
2,400 |
3,700 |
11,900 |
31% |
| Staff |
15 |
41 |
70 |
75 |
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| * Note: excludes GIPF and insured retirement annuity funds |
Here are a few photos taken at our internal 23rd anniversary celebration:
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| MD Marthinuz handing flowers to Charlotte, our first employee |
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| Tilman and Frieda cutting the cake |
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Director Rauha helping to cut the cake |
Important circulars issued by RFS
RFS issued the following circular in July. Clients are welcome to contact us if they require a copy of any circular.
- RFS circular 2022.07-09 – Confirmation of Professional Indemnity Cover
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 A note on !Kharos
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Applause for a job well done!
Today we share the experience of a client with a 600+ payroll, with the service of the !Kharos team:
“Dear P…
Good day,
No queries from my side thus far.
P… and team I would like to thank you and applaud you for a job well done. Our pay slips look very neat and tidy. Overall, it has been absolute pleasure working with you and H… thus far. I appreciate all your efforts.
Kind regards,
J… N…”
Leave your payroll management to the experts
At !Kharos, our Payroll Professionals lighten the load of Statutory Compliance and Legislation issues, through our professional relationships and direct system integration. As Payroll Processing demands higher flexibility, companies are driven towards consistent automation.
Leave the heavy lifting to us and enhance your employees’ experience through a partnership with !Kharos.
For a live System Demonstration, contact
- This email address is being protected from spambots. You need JavaScript enabled to view it., (tel 446 024) or
- This email address is being protected from spambots. You need JavaScript enabled to view it. (tel 081 221 3563)
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 News from NAMFISA
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Notes from the NAMIFSA industry meeting
Compiled by Kai Friedrich: Director Operations
NAMFISA summary of industry comments on standards and regulations
NAMFISA conducted an industry meeting at NIPAM on 27 July. Here are our in-house notes.
- Opening and Welcoming
- An apology for the Chairperson, Lovisa Indongo-Namandje, was noted. Veneranda Mahindi took over as the Chairperson of this meeting.
- Approval of the Agenda
- No additions to the agenda were noted.
- Approval of the Minutes of the Meeting held on 24 November 2021
- The minutes were accepted as a true reflection of the proceedings, with only minor typographical corrections.
- Matters arising (24 November 2021 meeting)
- Feedback on the Fund Re-Registration Plan
- NAMFISA noted that no feedback was received on the fund re-registration plan proposal after the last meeting.
- Q: a question by industry was raised why NAMFISA requires soft copies of the rules to be submitted, since there are risks related to it.
- NAMFISA responded that it is easier to assess from their side and to not have to retype rule extracts in case of queries or comments to be sent to funds. A hardcopy would still be required for NAMFISA to put their approval stamp on, so the risk of amending a soft copy is low. Also, hardcopies would be required for NamRA approval.
- Q: What if rules are not submitted in a quarter allocated to a fund?
- NAMFISA: The plan is merely for NAMFISA’s ease of administrative burden and planning with re-registrations. There are no legal repercussions on a fund should they not submit the rules in the allocated quarter.
- Q: What about special rules for umbrella funds?
- NAMFISA: this is still under deliberation within NAMFISA.
- Feedback on the Model Rules Template
- NAMFISA indicated that not much feedback on the rule template was received. Sophia indicated that she did provide comments, but it seems it never reached NAMFISA’s offices. NAMFISA stated the rules template is merely a guideline for funds to set up their rules but are hoping that industry would apply the structure for their fund rules.
- Industry will also still have an opportunity to comment on the forms that funds will need to submit via ERS in future, once FIMA is effective.
- Feedback on Electronic Signatures
- Electronic signatures will be provided under the Electronic Transactions Act in future. The relevant Regulation under that Act, which regulates the use of electronic signatures, has not yet been published and thus NAMFISA is also not in a position to give any further information or guidance.
- Standing Items
- Departmental staff movements
- It was noted that Sakaria Mwiiyale and Ernestu Augustus have left NAMFISA since the last meeting.
- Complaints lodged with NAMFISA
- The information in the slides, as circulated before the meeting, was taken as read. No further comments or questions were raised.
- Regulatory framework
- Permissible deductions in terms of section 37D(b)Dickson Matengu gave a bit of background and overview of the circular issued by NAMFISA a while ago around this matter.
- Q: what if Fund is listed as defendant in a court case, can the benefit be withheld in such case?
- NAMFISA: the Fund must consider all relevant factors and cannot withhold purely due to this reason. Need to consider if the employer really has a case against the member and whether it relates to fraud / theft / misconduct / dishonesty as per the Act.
- The employer can always lodge an interdict against the fund to not pay out the benefit.
- Feedback from RFIN
- The following matters were raised in a meeting between RFIN and NAMFISA a couple of days ago:
- Umbrella funds not being able to register new participating employers due to the risk benefit issue.NAMFISA: there is no moratorium on registering rules and industry guidelines were provided as to what rules must contain. However, NAMFISA does not state that rules may not contain risk benefits at all.
- In addition, the legal route is available for funds (appeals board, court) should funds not agree with NAMFISA’s interpretation of the Act.
- If employers submit full rules when they only amend a section thereof (instead of submitting only amendments to that section), NAMFISA is obliged to review the entire set of rules and thus may pick up other issues than only on the amended section, which were previously approved by NAMFISA.
- Progress on face-to-face consultations on FIMA and feedback on industry comments received.
- NAMFISA: this will be addressed later in the agenda.
- Status on the Administration of Estates Act
- NAMFISA does not have any further feedback on this matter. Per a meeting held some two years ago with the Minister of Justice, industry was allowed to follow what they have been doing before the amendment was passed.
- Is it the intention by NAMFISA to make provident funds compulsory to annuitise benefits on retirement under FIMA?
- NAMFISA: FIMA is quite clear on how to pay benefits on retirement. There is no intention to do away with Provident Funds, but unfortunately the Act as it stands can also not be amended anymore.
- Feedback on statutory submissions
- This was presented and taken note of.
- New Matters
- NAMFISA Five-Year Strategy
- This was presented and taken note of.
- FIMA consultations
- NAMFISA circulated feedback on industry comments on the RF Standards earlier the month. It was noted that this only included the comments that were accepted thus far by NAMFISA and where Standards would be amended accordingly. The remainder is still under review and the rejected comments will be shared at a later stage too.
- It was also noted that the General Standards will be dealt with separately.
- NAMFISA attempts to provide full written feedback on all industry comments received by October 2022. It was noted that there is no plan to have face-to-face consultations thereafter, NAMFISA considers industry comments and their feedback as industry consultation as the law only requires NAMFISA to consider the input received.
- Some discussion ensued around the process and why NAMFISA does not consider it necessary to hold face-to-face consultations, especially around the rejected comments. It was also noted that NAMFISA cannot use the section 409 of FIMA to follow the consultation process, since this Act is not yet effective. NAMFISA mentioned that the Interpretation of Statutes Act does allow for certain processes to become effective before an Act is effective.
It was finally agreed that industry will be provided time until somewhere next week to provide comments on the proposed changes to some of the Standards, as included in the slides, since it seems not everyone received these in advance to be able to provide input at this meeting.”
NAMFISA summary of industry comments on standards and regulations
NAMFISA circulated its 41-page summary of public comments submitted by 28 February 2022. For each comment, the sheet reflects:
- A description of the concern;
- The proposed amendment of the regulation or standard;
- Whether the proposed amendment was accepted or rejected by NAMFISA with its comments.
All comments were accepted and NAMFISA will make changes. Some comments are duplicated as some commentators submitted their comments directly to NAMFISA and via their industry bodies.
Importantly, NAMFISA accepted the following changes
- To replace the complex formulae for determining interest on late payment of benefits and employer late payment of contributions to a simple rate of repo plus 4%. This is the rate that also applies to fund housing loans.
- To allow a member to submit a shortened version of a beneficiary nomination form where there is no change.
- To provide for the nomination not to only deal with lump-sums but also with annuities.
- Defined benefit funds may offer life annuities.
- Contingency reserves are not liabilities but reserves.
- Retirement funds may offer ‘with-profit’ annuities.
- The annual NAMFISA report may be submitted in electronic format or in hard copy.
NAMFISA flags five entities for possible risk to financial sector
“The Namibia Financial Institutions Supervisory Authority (NAMFISA) has flagged 5 entities operating in the country’s capital markets which could pose a possible risk to the country’s financial sector.
This comes as the entities failed to comply with some regulatory requirements of the non-banking sector regulator…
According to NAMFISA’s latest quarterly report, assets in the country’s Nonbank Financial Institutions (NBFIs) decreased quarterly by 0.5% and increased annually by 8% to N$368.6 billion at the end of the first quarter of 2022.
Investment managers’ assets under management increased by 1.5% on a quarterly basis and by 8.4% on an annual basis to N$211 billion at the end of the first quarter of 2022.
Pension funds continued to be the largest source of funds for investment managers’ assets under management, representing 51.5% of the total assets, an increase of 1.8% to N$108.7 billion.
Assets under management based on geographic allocation indicate that Namibian domiciled assets constituted 54.6% , investments in the CMA constituted 32.7%, investments in the offshore market constituted 11.9%, and the remaining 0.8% was invested in Africa at the end of the quarter under review…”
Guidance note on FIMA fund re-registration
NAMFISA issued a guidance note on FIMA fund re-registration to retirement funds, friendly societies, and beneficiary funds. This guidance note sets out the FIMA requirements concerning the constitution of boards of trustees that funds must comply with, within 90 days of the relevant sections coming into force. It also sets out the content of the application for the re-registration of the fund’s rules. The FIMA requires that funds must apply for re-registration of their rules within twelve months of Chapter 5 coming into force and requires funds to indicate well ahead of time in what calendar quarter it will submit its application to assist NAMFISA in streamlining its work.
Download the guidance note, here...
NAMFISA is focusing on amending the FIMA
“…FIMA was supposed to be implemented by the first of October and we foresee that the implementation would take much time and therefore given what needs to happen, the removal of cross referencing might move quickly and the FIMA act will not affect our strategy. Once F[inancial] S[ervices] A[djudicator] BILL amendments have been passed by Parliament and assented to by His Excellency the President of the Republic of Namibia, a date for the implementation of FIMA and NAMFISA Acts will be determined by the Minister of Finance," NAMFISA Chief Executive Officer Kenneth Matomola said.
He said given the time frame that is needed to complete regulations, the authority will refocus on having the amendments to the FIMA and NAMFISA Acts passed by Parliament…” Read the article in The Brief of 16 August, here...
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 Legal snippets
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Can you request that your death benefit be paid into your testamentary trust?
An article that appeared in ‘Pensions World’ magazine of September 2010, deals with payment of a lump sum death benefit by a fund to a testamentary trust. Where member directs payment of death lump sum to his/her testamentary trust, the trust deed must provide for the following:
- It must make provision to receive money from a retirement fund.
- It must provide for fund benefits to be dealt with by the trustees of the trust, in the manner directed by the fund.
- Capital must be ring-fenced; capital and income must vest in the designated beneficiary and may not be redistributed.
Disposition of capital of deceased beneficiary in beneficiary trust
When disposing of the death benefit of a deceased fund member, trustees commonly direct that the capital allocated to minor beneficiaries be paid into a trust for the benefit of the minor beneficiary until the beneficiary reaches majority. Section 37C of the Pension Funds Act defines the trustees’ obligation concerning the disposition of a death benefit. It is clear from this section that the trustees are obliged to apply their discretion in allocating capital to a beneficiary who must be a natural person.
However, under certain circumstances, a benefit can be paid to a trust. As explained in the preceding article ‘Can you request that your death benefit be paid into your testamentary trust?’ the trust deed must comply with 3 key conditions as set out. One of these conditions is that the capital must be ringfenced and that capital and income must vest in the beneficiary and may not be redistributed. It follows that in the event of the death of the minor beneficiary prior to the ‘expiry date’ of his trust, any remaining capital, including interest must be paid to the deceased beneficiary’s estate.
If a retirement fund’s dependants trust deed does not make it categorically clear that a beneficiary’s benefit from the fund vests in the beneficiary for his or her sole and exclusive benefit, the trustees of the fund are well advised to ascertain that the trust deed is amended accordingly.
Death benefits and S 37C, when do you have to pay
In a technical guide on the distribution of death benefits, the author, Liz del la Harpe makes a few important points that are overlooked too easily, regarding the time frames for the payment of death benefits in case of each of the 5 different scenarios envisaged in section 37C:
- There are dependants but no nominated beneficiary:
The benefits must be paid to the identified dependants within 12 months from the date of death.
- There are no dependants but nominated beneficiaries:
Payment to the beneficiaries may only be made after the expiry of the 12-month period.
- There are both dependants and nominated beneficiaries:
The benefits must be paid within 12 months from the date of death.
- There are neither dependants nor nominated beneficiaries:
The relevant subsection of section 37C does not set out a time frame and it is argued that the benefit can only be paid to the estate of the deceased after expiry of the 12-month period from date of death.
- There are no dependants, and the deceased nominated a beneficiary only for a portion of the benefit:
Payment to the estate and the nominee will become due and enforceable on the expiry of the 12 month period from date of death.
One topical question addressed in this article is ‘when does the duty to pay arise?’
A debt becomes due when the duty to pay arises. Where a debtor’s liability is dependent upon the performance of certain conditions, the debtor will not be in mora until a duty to pay arises, e.g. all dependants of a deceased needed to be and then have been determined.
Mora can arise where the debtor’s need is urgent and the creditor’s delay is unreasonable. The common belief that a fund’s duty to pay is contingent upon the expiry of the 12-month period referred to in Section 37c is not correct. The duty to pay is not dependent on this but rather whether the trustees are satisfied that they have investigated and considered with due diligence and are able to make a decision.
Other questions addressed are:
- What is the objective of Section 37C?
- What is the duty of the board of trustees in this regard?
- Identifying and tracing dependants.
- Do all identified dependants automatically qualify?
- What about nominated beneficiaries?
- Benefit allocations to the identified dependants.
Read the full technical guide for trustees by Liz de la Harpe, legal adviser, Glacier by Sanlam in Insurance Gateway, here...
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Snippets for the pension fund industry
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Five ways employers can help employees prepare for a better retirement
- Conduct regular benchmark reviews: Over the years, your company is very likely to have grown and changed quite significantly, meaning that what was once the right decision for you and your staff members may no longer be the optimal choice. In fact, it could be that the most favourable solution may not have even been in the market at the time you set up your retirement fund.
- Know your costs: While it is true that the lower the cost, the larger the contributions a member can make towards their retirement pot, the cost is not the only important factor to consider; there is also the question of whether the costs you are paying represent value for money.Unfortunately, in the pension and provident fund space, this can be quite a complicated process. Most employers are aware of their administration fee, as this is the one that is explicitly paid and where much of the focus lies, however, this usually represents the smallest component of the total fee structure. The bulk of your fund costs are made up of investment management fees, adviser fees and other add-on fees such as policy fees, platform fees, trustee levies and regulator levies.
- Assess member education tools: As part of your review and decision-making process, you would likely have looked at the resources made available to members, in addition to the direct member updates and employer presentations that your administrator should also offer. With the advances in technology, there should be a wide range of easy-to-access tools that can prompt members to make better decisions during their investing journey and help empower them to take ownership of their retirement.
- Encourage annual incremental increases in contributions: For various reasons, people are simply not saving enough for retirement. For many, the commonly referred to guide of saving 15% of your monthly salary can seem out of reach. However, as an employer, there are small tweaks you can make to your fund to help your staff work towards this target. A simple but effective method is to increase your employees’ retirement fund contributions by 1% annually until a 15% total contribution is reached. You can time the increase to coincide with bonus or salary increase cycles.
- Encourage additional voluntary contributions: As an employer, you are uniquely positioned to play an instrumental role in your employees’ future financial stability. Offering retirement benefits is not only a good way to get your employees to start saving for retirement sooner rather than later to help set them up for financial success, but retirement benefits can also help you retain staff and set your business apart from your competitors.
Read the article by Mica Townsend of Allan Gray in Cover of 14 July 2022, here…
Ten things you might spend more on in retirement
When it comes to budgeting for retirement, several expenses fall away at retirement which, in turn, can reduce your post-retirement expenditure and provide some financial relief.
However, there are a number of expenses which may increase either at retirement or during retirement which should not be overlooked. When putting your post-retirement budget together, consider the extent to which any of the following may increase:
- Healthcare - medical inflation – which is generally around CPI +4% per year – is a very real threat to your retirement savings and should be carefully budgeted using future cashflow projection modelling
- Hobbies and entertainment - With more time on your hands, keeping yourself engaged, active and socially connected will be important, and it is possible that spending more time on your hobbies and social activities will cost more.
- Pets and vet care – Pet food, vet care, medication, medical treatment and pet accessories can be pricy, especially if faced with large, upfront vet bills.
- Travel and experiences - Travel generally becomes more and more difficult as we age and, as such, retirement plans normally factor in higher travel expenses in the first decade of retirement, tapering out as one ages and becomes less physically mobile.
- Home renovations and adaptations - If you suffer from a disability or physical incapacity, you may need to make home adaptations to allow for ease of movement.
- Levies and security - If you plan to live in a retirement village, townhouse complex or life rights village, you can expect to pay monthly levies which may be considerable depending on the utilities on offer.
- Technology and online entertainment - Staying connected with loved ones and friends – especially if you have loved ones living overseas – means staying technologically updated and relevant.
- Reading - it’s likely that you’ll spend more time reading during your retirement years in the form of books, e-readers, magazines, newspapers and other publications.
- Charitable giving - many retirees get more involved in their Church, charities and NGOs and you may be tempted to spend more on your charitable giving than your budget allows.
- Family and grandchildren - Most grandparents long to spoil their grandchildren whether in the form of money, gifts or experiences.
Read the article by Craig Torr of Crue Investments in Moneyweb of 21 June 2022, here…
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Snippets of general interest
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26 universities in South Africa listed in new global ranking
A new global ranking of universities, using open data, has ranked all of South Africa’s universities based on the quality, quantity, and access to their web content… Using webometrics, the group focused the 2022 ranking on three main indicators.
- Visibility: The number of external networks (subnets) linking to the institution’s web pages (50%)
- Transparency or Openness: The number of citations from the Top 210 authors, excluding the top 20 outliers (10%)
- Excellence: The number of papers amongst the top 10% most cited in each one of all 27 disciplines of the full database over the last five years (40%)
The ranking of the top ten South African universities is below
| Local # |
University |
Global # |
| 1 |
University of Cape Town |
245 |
| 2 |
University of the Witwatersrand |
393 |
| 3 |
Stellenbosch University |
437 |
| 4 |
University of Pretoria |
447 |
| 5 |
University of KwaZulu Natal |
596 |
| 6 |
University of Johannesburg |
663 |
| 7 |
University of South Africa |
805 |
| 8 |
University of the Western Cape |
921 |
| 9 |
University of the Free State |
1114 |
| 10 |
Rhodes University |
1133 |
Read the article by Staff Writer in Businesstech of 11 August, here…
“Best and worst South African universities to become a CA
The ITC is the first of two professional qualifying examinations an aspiring chartered accountant (CA) must pass on their journey to achieving the CA(SA) designation.
The ITC tests candidates’ ability to apply technical competence gained during the SAICA accredited academic programme, which consists of an undergraduate and a postgraduate programme.
To pass, candidates must obtain an overall pass mark of 50% and achieve a sub-minimum of at least 40% in three of the four professional papers.
The table below shows the performance of South African universities in the 2022 SAICA ITC.
2022 SAICA ITC Performance
| University |
Pass rate % |
| University of Pretoria |
99 |
| University of Stellenbosch |
96 |
| North-West University |
95 |
| University of Cape Town |
89 |
| University of the Witwatersrand |
88 |
| Nelson Mandela University |
83 |
| University of Free State |
76 |
| University of Johannesburg |
73 |
| University of Limpopo |
71 |
| Milpark Education |
70 |
| University of the Western Cape |
66 |
| University of Kwazulu-Natal |
59 |
| IIE |
49 |
| Institute of Accounting Science |
47 |
| Rhodes University |
45 |
| University of Fort Hare |
44 |
| Regent Business School |
33 |
| University of South Africa |
20 |
Read the article in Daily Investor of 5 August 2022, here…
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 And finally...
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Great quotes have an incredible ability
to put things in perspective.
"There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self" ~ Ernest Hemingway
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Disclaimer
Whilst we have taken all reasonable measures to ensure that the results reflected herein are correct, Benchmark Retirement Fund and RFS Namibia (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.
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