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Benchtest Newsletter
Issued January 2023
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In this newsletter
Benchtest 12.2022 – Access to Information Act, other relevant law amendments, and more...
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Jump to...
Important notes & reminders
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NAMFISA levies
- Funds with January 2023 year-ends must submit their 2nd levy returns and payments by 24 February 2023;
- Funds with July 2023 year-ends must submit their 1st levy returns and payments by 24 Febtuary 2023;
- and funds with February 2022 year-ends must submit their final levy returns and payments by 28 February 2023.
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 2022, here... |
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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 'A note from the MD', Marthinuz Fabianus gives a New Year message to RFS stakeholders
In 'Tilman Friedrich's industry forum' we present...
- Monthly review of portfolio performance – 31 December 2022
- The defining development for economies and markets in the next decade
- What is service worth to you?
In Compliments, read...
- A compliment from an HR officer of a large municipality
In Benchmark: a note from Günter Pfeifer, read about...
- The Benchmark Retirement Fund welcomes new participating employers
- Rule amendment no 6 approved
In 'News from RFS', read about...
- RFS welcomes two new prestigious clients
- Saying goodbye is never easy!
- Long service awards complement our business philosophy
- Important circulars issued by RFSs
In 'News from NAMFISA', read about...
- Minutes of the last industry meeting
- John Uusiku leaves NAMFISA
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In 'Legal snippets,' read about...
- Tax-deductible contributions increased
- Administration of Estates Act amended
- Access to Information Act promulgated
In 'Snippets for the pension funds industry,' read about...
- Where to invest in a low-growth environment
- Is now the right time to invest in local assets?
In ‘Snippets of general interest', read about...
- How to protect your family’s inheritance and estate against fraudsters
- The average take-home pay in SA right now
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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 Marthinuz Fabianus
A note from the Managing Director
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New Year message to RFS stakeholders
Dear RFS stakeholders,
We have turned our back on 2022 and are into 2023, boots and all!
I hope you all had a relaxing festive season and found ample opportunity to regenerate and recharge your energy to head into the winds 2023 may blow at you!
I look forward to seeing you and interacting with you in the course of the year.
At RFS, we stand ready to serve you and to live up to our credo of providing rock-solid fund administration that lets you sleep in peace!
I wish you a prosperous 2023 with lots of fun and excitement, health and happiness!
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Tilman Friedrich's industry forum
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Monthly Review of Portfolio Performance
to 31 December 2022
IIn December 2022, the average prudential balanced portfolio returned -0.9% (November 2022: 3.0%). The top performer is Allan Gray Balanced Fund with 0.8%, while Stanlib Managed Fund takes the bottom spot with -2.1%. For the 3-months Allan Gray Balanced Fund takes the top spot, outperforming the 'average' by roughly 2.1%. Hangala Prescient Absolute Balanced Fund underperformed the 'average' by 4.0% 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 December 2022 provides a full review of portfolio performances and other insightful analyses. Download it here...
The defining development for economies and markets in the next decade
Russia and China have global ambitions, despise being subservient to the US, and resist it wherever possible. Russia, for one, had the audacity to frustrate US attempts to topple President Assad of Syria. China has been taking a more indirect approach to challenging US domination, such as its belt and road project. Many other countries, who simply cherish their autonomy, do not have the means to resist but will take the opportunity of ridding themselves of the US straight jacket.
It seems to me that the US picked Russia as the weaker link in the chain of resistance. At the same time, the fall of Russia to the west would give the west access to China’s backdoor. Under former President Jeltzin, the US had nearly achieved its goal, but then came President Putin, whose purpose was and still is to restore the former Soviet Union’s position in the world. Subjugating Russia is not a recent US strategy if one considers the colour revolutions all around Russia’s periphery. John Bolton, former US ambassador to the UN, proudly acknowledged that the US carried out several regime’ changes that he was personally involved in. He did not say where, but the fact is that the US uses such tools to cement its hegemony. Henry Kissinger and Angela Merkel are reported to both have acknowledged that the Ukraine conflict is by the design of the west.
I believe the US will not relent on its goal to subjugate Russia as a first step, and China to follow, even if Russia is prepared to offer a compromise. Should Russia get the better of Ukraine, Poland will likely be ‘sent to the front’, possibly with other former eastern bloc and Nordic countries. If that does not ‘do the job’, we will likely see a further expansion, another world war. In fact, some political commentators, like US economist, Nouriel Roubini, believe the third world war has already started... The Monthly Review of Portfolio Performance to 31 December 2022 also reflects the editor’s views on current developments and their impact on investment markets. Download it here...
What is a service worth to you? (Part 1)
One of the problems in the pensions industry is that a significant proportion of costs cannot really be quantified and will not be part of the equation of cost versus benefit.
If you choose an asset manager offering the lowest management fees, your investment return will be higher than the return of a manager with higher fees? Of course not, but how do you factor in future out- or underperformance?
Suppose you choose any other service provider, such as your consultant, your actuary, your insurer, or your administrator, based on the lowest costs. Can you be sure of a better outcome? Again, definitely not. How do you factor in future losses, direct and consequential, such as industrial action by your employees, arising from inferior service delivery?
We believe that the question of fees needs to be seen more philosophically. Yes, costs erode the outcome, always. How about if you did it yourself, assuming you really want to save all costs? Would you be in a better position? This is the key question in our view.
We are all in an occupation to serve or to produce for other people, who in turn are in the same position, to the best of our ability. We all want to live, eat and drink, and if we don’t produce our own food and drink, we have to buy it from someone who does. That person spends his time doing that and does not have to attend to his investment because I do this for him again.
The first principle is, whatever you do not do yourself, you will have to pay someone to do it for you. Specialisation and a functional free market mechanism are really what one should be concerned about. Once these two factors are in place, the outcome should be optimal.
Given that you cannot be a master of all trades and therefore have to rely on the free-market mechanism and specialisation, the second important principle is that of ownership. A free market economy with individual ownership of production factors has proven to be superior to an economy with collective ownership of production factors. In our many years in this industry, it has been shown all over again that this principle holds true for pension funds as well. Where a fund is managed through collective ownership, it is usually dysfunctional, at the expense of its members. Where a fund is driven by the conviction of ownership of the employer, it is usually functioning exemplary, for the benefit of its members.
Unfortunately, the FIMA will remove the directional and tempering influence of the employer from the management of pension funds. We believe that we will live to regret it.
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 an HR officer of a large municipality
Dated 27 July 2022
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“Thank you, my sister. You are always so amazing and smart.” |
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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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The Benchmark Retirement Fund welcomes new participating employers
We are pleased and proud to advise that the following companies joined the Benchmark Retirement Fund recently:
- Unitrans
- The Central Procurement Board
- Fresh Namibia
- Namcor
We sincerely appreciate this gesture of confidence and trust in the Fund and RFS as its fund administrator and extend a hearty welcome to these organisations and their staff!
We do n0t want to dominate the market with a low-cost proposition and knocked-down service levels. We focus on transparency, exceptional reporting, and superior service. It should support and promote sound industrial relations, the employer’s employment philosophy, and its objective to attract and retain the best staff in a competitive labour market.
RFS’ motto is to provide rock-solid administration that lets you sleep in peace!
If these objectives are essential to your company and close to your heart, the Benchmark Retirement Fund, administered by RFS Fund Administrators, is your ideal partner for providing retirement benefits to your staff!
Rule amendment no. 6 approved
Rule amendment no 6 was approved by NAMFISA effective from 1 January 2023.
The purpose of the amendment is to –
- Reflect the change of the Founder's name (to “RFS Fund Administrators (Pty) Ltd”).
- Provide for any capital remaining on the death of a Survivor receiving an annuity from the Fund, to be paid to their estate (instead of an annuity, as before) since section 37C of the Pension Funds Act 24 of 1956 is not applicable.
- Provide that section 37C of the Pension Funds Act 24 of 1956 applies when a Living Annuity Pensioner dies (to pay a lump sum instead of an annuity, as before).
Important circulars issued by the Fund
The Benchmark Retirement Fund did not issue any circulars since circular 202207 on changes to the Benchmark Default Portfolio. Clients are welcome to contact us if they require a copy of any circular.
Günter Pfeifer was the Principal Officer and a trustee of the Benchmark Retirement Fund for many years. He holds a Bachelor of Commerce (Cum Laude). Günter completed his articles with Deloitte & Touche in Windhoek. 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 welcomes two new prestigious clients
We are pleased and proud to advise that the Standard Bank Namibia Retirement Fund and the MTC Pension Fund appointed RFS as their administrator from 1 April 2023 and 1 December 2022, respectively!
We sincerely appreciate this gesture of confidence and trust in RFS as their fund administrator and extend a hearty welcome to these two organisations and their staff!
We do not want to dominate the market with a low-cost proposition and knocked-down service levels We focus on transparency, exceptional reporting, and superior service. It should support and promote sound industrial relations, the employer’s employment philosophy, and its objective to attract and retain the best staff in a competitive labour market.
Our motto is to provide rock-solid administration that lets you sleep in peace!
If these objectives are essential to your company and close to your heart, RFS is your ideal partner
Saying goodbye is never easy!
RFS regrets to advise that Julien Oosthuizen, Sharita Visser and Kristof Lerch will leave our employ at the end of January to pursue other interests. Both were employed in the Benchmark division and will leave a void with colleagues and clients. Their positions will be filled in due course, and clients will be informed.
Furthermore, we sincerely regret that Kristof Lerch will also leave our employ at the end of January to pursue personal interests. RFS will be looking for suitable candidates to fill this position without delay.
While we are sad to see such dedicated persons leaving, we thank Julien, Sharita, and Kristof sincerely for the mark they made in our organisation, and the time they dedicated to RFS. We wish them only the best for the future and hope that their dreams and aspirations will come true!
Long service awards complement our business philosophy
RFS’ business is primarily about people. Whenever a fund changes its administrator, it loses fund information and knowledge. Similarly, every time the administrator loses a staff member, our clients lose corporate memory. As a small Namibian organisation, we cannot compete with large multinationals technology-wise because of the economies of scale, and sophistication global IT systems offer. We differentiate ourselves through excellent personal service and commitment to our clients, and IT systems that are more flexible, versatile and adaptable, and more appropriate for the Namibian environment. We are proud of our staff retention as we know that it is the key to our success!
The following staff members celebrate anniversaries at the end of January. We express our sincere gratitude for their loyalty and support over all these years and look forward to their continued dedication and commitment to the company, its clients, and colleagues!
- Valerie Mudisie – 5 years
- Rudigar van Wyk – 10 years
- Austin Thirion – 10 years
- Caroline Scott – 20 years
- Lilly Boys – 20 years
Staff improving their competencies
Learning should never stop, and “education is the greatest equaliser” said Nelson Mandela.
RFS actively encourages and supports staff wishing to advance their qualifications in various ways, and we are very proud of everyone successfully walking this arduous road!
We congratulate Christina Linge on obtaining a Higher Certificate in Financial Planning from Milpark Education! Let this milestone be the beginning of the road to greater heights!
Important circulars issued by RFS
RFS issued the following circular in January. Clients are welcome to contact us if they require a copy of any circular.
- RFS Circular 2023.01-01 attaching the RFIN training calendar for 2023.
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 News from NAMFISA
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Minutes of the last industry meeting
In our previous newsletter, we provided our in-house feedback on the pension fund industry meeting held on 24 November 2022.
NAMFISA recently circulated the minutes of the meeting, which you can download, here…
We noted a few interesting discussions.
- Umbrella fund rules
- Under the FIMA, NAMFISA will not approve special rules as the Act makes no reference to special rules. Comment: The PFA also makes no reference to special rules, yet NAMFISA insisted that umbrella fund special rules must be approved and issued directive PI/PF/DIR/4/2015 to that extent despite RFS’s arguing against it.
- The fund’s main rules must provide the framework of substantive provisions for what special rules can provide in respect of a participating employer.
- The Master Rules should contain a detailed description of the cost universe of the fund and the fees applicable to Participating Employers, whose special rules must comply with this universe.
- Master Rules should indicate accounts to be maintained by the fund and detail the financial transactions to be recorded under such accounts.
- The Master Rules should state the nature and extent of benefits offered by the Fund and contain an exhaustive list of all benefits available to members of participating employers (per RF.S.5.7).
- The Master Rules should detail the investment philosophy of the Fund, which must be in line with its Investment Policy (per RF.S.5.18).
- Draft standards to be published soon
- GEN.S.10.2 on fit and proper requirements for regulated persons (re-published).
- GEN.S.10.10 on outsourcing of functions and responsibilities (re-published).
- GEN.S.10.21 on treating customers fairly.
- RF.S.5.11 on alternative forms of payment of pensions for DC funds underwent substantive changes (re-published).
- NAMFISA off-site inspections – main risks identified
- Governance risks: Conflict of interest – Principal Officer, long-serving service providers, and significant levels of unclaimed benefits reported. Comment: what about the risks service provider changes entail?
- Legal, regulatory, and compliance risks:
- Non-compliance with Section 37C of the Act (disposition of death benefits);
- non-compliance with funds rules (composition of the board);
- non-compliance with Section 93 of the Administration of Estates Act (payment of unclaimed benefits to the Master);
- non-compliance with Section 13A of the Act (timely payment of contributions).
- Market risks: Low investment returns. Comment: What are funds expected to do about low market returns? Should NAMFISA not rather review its supervisory framework?
- Strategic risk: Decline in funds’ contributions. Comment: What are funds expected to do about declining fund contributions or funds even being terminated in anticipation of being straight jacketed under the FIMA? Reconsider the FIMA?
John Uusiku leaves NAMFISA
John Uusiku, manager of insurance and medical aid funds, left NAMFISA at the end of December last year to take over the reins from Ndjoura Tjozongoro as CEO of NASRIA.
Comment: We congratulate John on his appointment and wish him well at the helm of NASRIA!
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 Legal snippets
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Tax-deductible contributions increased
The parliament approved an amendment of the Income Tax Act through Act no 13 of 2022, published in government gazette 7992 of 29 December.
In short it amends the Income Tax Act, 1981, so as to insert additional circumstances under which amounts are deemed to have accrued from a source within Namibia; to clarify the deduction of contributions made to company-owned policies; to increase tax-deductibility of retirement fund and education policy contributions; to provide for the furnishing or serving of a tax return or notice of assessment in electronic format; to amend the rules relating to the allocation of tax payments; to provide for thin capitalisation rules; and to provide for incidental matters.
The changes relevant to the pensions industry are
- The deduction of contributions made to company-owned policies, and
- The increased tax-deductibility of retirement fund and education policy contributions.
The tax-deductible amount is increased to N$ 150,000 per year in respect of –
- an employee’s current, compulsory contributions to pension or provident funds;
- a person’s current contributions to a retirement annuity fund, if he carried on any trade during the year of assessment;
- a taxpayer’s current premiums paid during the year of assessment to a policy to provide funds at a future date for the education or training of a child or stepchild, and
- premiums on employer-owned long-term insurance policies that meet certain criteria (loss from death, disablement, or severe illness; the policy has no cash value or surrender value before the insured event occurs; policy not the property of someone else; the employer is not obliged to pay to the employee, director or their dependant or estate under any scheme).
Administration of Estates Act amended
The parliament approved an amendment of the Administration of Estates Act through Act no 9 of 2022, published in government gazette 7988 of 29 December. It repeals section 87A of the Act effective 29 December 2022. Section 87A was introduced by the then Minister of Justice, Sakkie Shangala, in the dying moments of 2018 without any consultation of the affected parties.
Section 87A threw the pensions and other industries into disarray, obliging anyone holding money due to a minor to transfer such money to the Master of the High Court. The amendment was poorly considered, and industry fought it tooth and nail to no avail. Because the amendment was inexecutable, industry was forced to ignore the amendment in contravention of the law.
Current industry practice concerning the disposition of benefits due to minors is thus now compliant again with the Act.
Interestingly, the Act still considers a minor as a person below the age of 21, although the Child Care and Protection Act reduced the age of majority from 21 to 18 effective 30 January 2019.
Access to Information Act promulgated
The parliament approved the Access to Information Act No 8 of 2022, published in government gazette 7986 on 28 December 2022. It commences on a date determined by the Minister by notice in the gazette.
In short, the purpose of the Act is -
- to provide for the appointment of an independent and impartial Information Commissioner and Deputy Information Commissioners;
- to provide for the obligations of public entities;
- to provide for the right of access to information held by public and private entities;
- to provide for the promotion, creation, keeping, organisation, and management of information in a form and manner that facilitates transparency, accountability, good governance, and access to information;
- to provide for requests for access to information;
- to provide for internal review, appeal, and judicial review of decisions on access to information;
- to provide for information exempt from disclosure; and
- to provide for incidental matters.
The Act applies to information held by a “public entity” or a “private entity” and requires “information holders” to provide information to a “requester”. To determine compliance requirements for fund administrators and pension funds, the definitions of ‘information holder’, ‘requester’, ‘private entity’, and ‘public entity’ needs to be considered:
“information holder” means a public entity or private entity from whom information has been requested;
“private entity” means -
- a natural person who carries on or has carried on any trade, business, profession, or activity, but only in such capacity;
- a partnership or trust which carries on or has carried on any trade, business, profession, or activity; or
- a juristic person or a successor in title, and where applicable, includes a former juristic person, but excludes a public entity;
“public entity” means -
- an “office”, “ministry” or “agency” of government as defined in section 1 of the Public Service Act, 1995 (Act No. 13 of 1995);
- an entity established by or under the Namibian Constitution or a statute;
- a private entity that –
- is totally or partially owned by the State, or financed, directly or indirectly, by the State; or
- carries out statutory functions or services or public functions or services;
“requester” means a person who requests access to information under this Act or any person acting on behalf of the person requesting access to information under this Act;
The term “statutory functions or services” is not defined in the Access to Information Act. It is, therefore, not clear whether the services and functions of administrators and pension funds would be considered statutory functions and services and consequently fall under these definitions. Our interpretation of the Act is that the ‘statutory functions and services” as referred to in paragraph (c)(ii) of the definition of “public entity” means the statutory functions or services carried out by a (private) entity established under a statute (refer to paragraph ‘b’ of the definition of “public entity”). The intention of the Act does not appear to consider administrators or pension funds a public entity.
Despite the uncertainty of administrators and pension funds being “public entities”, the Act also applies to “private entities” and “information holders” in general. Therefore, administrators and pension funds must establish the nature and extent of their obligations.
The main compliance requirements for private entities and information holders are the following:
- A private entity, or other person has the obligation to accord such assistance as may be needed for the protection of the independence, integrity, dignity and effectiveness of the Information Commissioner.
- Designation of information and deputy information officer, failing which it is the head of the entity by default.
- A private entity must assist the Information Commissioner in the course of any application, investigation or appeal under this Act to the best of its abilities.
- A person has an enforceable right of access to information held by -(a) a public entity; or
- (b) a private entity if the information may assist in exercising or protecting any fundamental human right or freedom.
- An information holder must attend to requests for information by a requester and meet the documentation requirements in a manner that complies with the Act.
- An information holder must assist a requestor to submit a valid request for information held.
- An information officer must consider requests for information, grant or refuse the request with or without a fee (i.r.o. reproduction, translation, or transcription) within 21 days, and immediately provide the information upon receipt of any fee or provide reasons for the refusal and offer a review of the decision by the head of the information holder.
- Where requested information relates to a third party or is commercial or confidential information of a third party, the information officer must notify the third party in writing to obtain its consent, within seven days of the receipt of the request.
- An information officer must, within 21 days of the receipt of a request for access to information, notify the requester in writing that the information cannot be found or does not exist by way of an affidavit that states substantive details.
- A person who wishes to obtain access to information held by an information holder must make a request in writing or orally to the information officer.
- Information to be provided in the official or other language which the requester prefers or best understands but any translation fee may be recovered.
- The information holder must meet the prescribed process for an internal review of a refusal to provide the requested information.
- An information holder bears the burden of proof in all proceedings relating to investigations and hearings, except where a private entity refused the request because the information requested does not assist in the exercise or protection of any right.
- A private entity may not grant access to exempt information as set out in part 9 except where part 9 of the Act provides for it.
- Where a request is refused based on the prescriptions of part 9, the information officer carries the burden of proof that his refusal meets the prescriptions of part 9 of the Act.
The Act provides for a maximum fine for defined offences of N$ 100 000, or 5 years imprisonment, or both.
The Act provides for administrative fines for defined compliance failures of the information officer of a minimum of N$ 2000 for each day the request is not complied with and a maximum of N$ 30,000.
Conclusion
The Act imposes quite onerous requirements on a natural and legal person who carries on or has carried on any trade, business, profession, or activity. The term ‘activity’ is all-encompassing and would, in our opinion, include all natural and legal persons because they all carry out one or other activity, such as housekeeping, gardening, clubs, churches, etc. Courts will have to contemplate what the legislator’s intention is with this term.
The difference between a public and a private entity regarding compliance requirements appears to be that public entities have active operational compliance obligations while private entities must only comply once approached for information. Since pension funds hold information of many members, who often do require information, they and their administrators must proactively put in place processes for dealing with information requests. It will add to the cost of operating pension funds and will likely be another nail in the coffin of private funds.
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Snippets for the pension fund industry
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Where to invest in a low-growth environment
“With rising interest rates slowing down global economic growth, stock markets officially in bear territory, and the International Monetary Fund (IMF) warning that the ‘worst is yet to come’, investors can hardly be blamed for not knowing where to turn. But, as always, there are opportunities for discerning investors even in the most unfavourable circumstances. We consider the ‘types’ of businesses we prefer in an environment of depressed global growth...
Our view is that the steep rise in US short-term interest rates, which is pushing rates up around the world, will act as a drag on economic activity globally. This is of course exactly what rate hikes are supposed to do: cool the economy and thus bring down inflation. Under such circumstances, recession is an entirely possible outcome…
PREFERRED BUSINESS TYPES
At Sanlam Private Wealth, our investment philosophy will always centre on price, which we believe to be the dominant factor driving investment performance over the longer term. Having said this, in the face of anticipated lower global growth, there are certain ‘types’ of businesses in which we prefer to invest in the current environment:
Businesses with wide ‘moats’. What makes a company valuable is the ability to continue to earn high returns relative to its competitors and other industries regardless of the economic cycle. It’ll be able to do this if it has a competitive advantage that is sustainable, or what is known as a wide moat. At Sanlam Private Wealth, we’ve identified five main sources of sustainable competitive advantage, in descending order of importance:
Network effects – the more customers you have, the more it makes sense for new customers to join you. Think of the advantages enjoyed by Facebook and LinkedIn.
Switching costs – in terms of both money and effort. Imagine, for example, moving your entire business away from Microsoft products.
Brand/patent strength – Coke, Ferrari, Cartier and Apple come to mind.
Economies of scale – such as those enjoyed by Amazon.
Licences – ensuring a limited number of players in the market.
Businesses with wide moats are always an excellent core for an investment portfolio, but they typically deliver their best relative performance in more difficult times…
In the South African context, we see businesses like Prosus (which has superb network effects, the most powerful of sustainable competitive advantages) and Richemont (which has incredibly strong brands) as examples of businesses with wide moats…”
Read the complete article by David Lerche, CIO of Sanlam Private Wealth, in Cover 2 November 2022, here…
Is now the right time to invest in local assets?
“Looking at the news headlines on load shedding, corruption, labour disputes, damaged infrastructure, economic woes, and more, it’s easy to become disheartened about investing in South Africa.
However, one has to ask: Is this the objective South African story? Are there opportunities in this apparent chaos, and could it be that ‘local is lekker’ for a change when it comes to equities and bonds?
I think the key ones that I can maybe add are obviously increasing interest rates, as I’ve mentioned, and Eskom remains a significant challenge; we’ve all had to again go through the pain of extended load shedding. But the economic impact is significant. Unemployment [also] remains a huge structural challenge for us.
And to combat those you need growth. But we’ve experienced insufficient growth to combat it…
The debt-to-GDP is 140%, roughly, in the United States, versus 70% – about half [that] – in South Africa, which is quite a positive for us. And you mentioned the rise in commodity prices, which has been very good for our current account. So there’s merit in investing in South Africa relative to overseas markets.
If we do a similar comparison between the two countries, if we look at cash yields, for example, it’s quite easy to generate roughly a 6% yield on even a cash investment in South Africa at the moment, and interest rates are still going up.
And then our bonds are yielding around 10%, 11% as well, which is extremely attractive.
Valuations on our equities are at single-digit levels, and dividend yields [are] in excess of 4%.
Our profit margins are actually very sound. There’s a high component of commodity-company profitability in there, but our profit margins are actually higher than they are for US companies at the moment.
And if we look at the earnings yield coming out of South African companies, it’s almost double what you would receive out of the US on aggregate…”
Read the article by Ciaran Ryan in Moneyweb of 19 October 2022, here…
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Snippets of general interest
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How to protect your family’s inheritance and estate against fraudsters
“Many people hope to leave their loved ones a good inheritance and assets through estate planning, but the sad truth is that your hard-earned money and assets could end up in the wrong hands if they are not handled properly…In some cases, perpetrators use fraudulent Letters of Executorship (LOE) or Letters of Authority (LOA) to acquire access to the deceased's assets. In other instances, fraudsters target vulnerable families to trick them into surrendering power of attorney over the estate. Meyer shares a few tips to help families protect their estates and inheritances against fraud:
- Keep your paperwork in a secure location - Documents such as your ID, marriage certificate, Will, estate plan, assets, financial plans, or inheritances should always be stored safely.
- Choose a trusted executor for your Will and estate plan - Ensure that the executor you select has the skills and experience necessary.
- Don’t overshare or disclose information - People can protect themselves by not divulging their personal or financial information, whether it’s with extended families, close friends, colleagues, business partners, or other acquaintances.
- Examine all communication sent to you - Fraudsters often pose as call centre agents from financial service institutions or insurance providers, bankers, or lawyers. They also send messages, emails, and links with instructions that pressurise people to do certain things.
- When in doubt or suspicious, get professional help - If you have granted a third-party power of attorney and you suspect they are not being truthful, consult your estate planning advisor…”
Read the full article by Carin Meyer in Cover of 1 January 2023, here…
The average take-home pay in SA right now
“…The average nominal salary for October recovered to R15,489, the highest level since the R15,670 high reached in February 2022…
The latest figure comes at a time when the persisting load shedding, rising cost of living and protracted strike action by Transnet workers during October impacted the economy. However, salaries are still lagging compared to headline inflation.
“This is reflected in a 5.1% y/y decline in the real average salary recorded in October, though somewhat of a moderation compared to the decline of 8.3% in September,” said independent economist Elize Kruger…”
Read the full article by Staff Writer in Businesstech of 13 December 2022, here...
Comment: According to our database of pension funds in Namibia, the average pensionable salary was N$ 15 575 in July 2022, excluding non-pensionable remuneration such as allowances.
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 And finally...
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Great quotes have an incredible ability
to put things in perspective.
"The secret to success is to do the common things uncommonly well." ~ John D Rockefeller
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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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