– By GJ Mellet

There has been a major shift in the retirement fund industry from private standalone funds to multi-employer commercial umbrella funds. This is definitely not news to anyone even remotely involved with the industry, but is it the right decision to follow the herd?

The Financial Sector Conduct Authority (FSCA) is actively driving the reduction of the number of active funds to about 200, with the two main reason being consolidation and costs. The idea is to have a few large umbrella funds, large union-driven funds and some large standalone funds. This means that the members of approximately 90% of standalone funds is expected to find a new retirement fund home in a commercial umbrella fund. The last few years saw a big increase in the number of commercial umbrella funds which defeats the FSCA’s plan of a “few large umbrella funds”, but there is no doubt that the number of standalone funds will continue to decrease, especially in the aftermath of the Covid-19 pandemic.   Read more …

– Article featured on EBnet on the 28th of August 2020

– By Corné Heymans

The decision to place a fund into voluntary liquidation or, alternatively, to just deregister the fund after the Fund’s assets reduced to zero, generally rests with the Trustees when a fund comes to the end of its life.  There are no clear guidelines on which option to follow and one option may not appear to be better than any other.  The Trustees are therefore often left to their own devices to make this difficult decision and very few trustees have a full understanding of the potential consequences of the different options at their disposal.

What better way to learn than from someone else’s successes or failures?  Some of the advantages and disadvantages of different termination options are illustrated through the following case studies.  These real-life stories* highlight a couple of the good, the bad and the downright ugly outcomes that were experienced under these different scenarios. Read more …

– Article featured on EBnet on the 13th of August 2020

– By Manja Serfontein

Trustees are ultimately responsible for the compliance of a retirement fund with a multitude of statutory requirements that funds are subjected to.  Anything that may reduce the corresponding administrative burden will probably be welcomed by most Trustees, like the opportunity to apply for exemption from having to submit statutory actuarial valuations. The application is made to the Financial Sector Conduct Authority (FSCA).

However, the unintended consequences of valuation exemption should be carefully considered as it significantly increases the Trustees’ own responsibility towards ensuring the fund’s financial soundness if they no longer use the services of an actuary to support them in this regard.

Read more …

– Article featured on EBnet on the 15th of July 2020


– By Corné Heymans
Extraordinary times 

South Africa, and indeed the entire world, is finding itself in an unprecedented situation of having to deal with a pandemic that is causing havoc in all spheres of life where the “new normal” changes on a daily basis.  The challenges are not limited to our physical health, but our emotional and financial well-being is also taking severe strain.

With lockdown restrictions being reduced, the economic activity is slowly coming out of hibernation in most industries.  But I suspect that there are still many who will not be able to return to work.  Some of these individuals will not just temporarily loose part of their income, but may eventually be unemployed in cases where employers are unable to survive this crisis.

As if it is not already difficult enough to make ends meet from one day to the next, one should at same time also consider how this will change your longer-term retirement plans.  The question is how can you possibly meet your immediate financial needs while also keeping an eye on retirement planning? Read more …

– Article featured on EBnet on the 2nd of June 2020