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ASISA: EMPOWERING RETIREMENT FUND TRUSTEES TO IMPROVE WORKERS’ RETIREMENT PROSPECTS

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THE ASISA FOUNDATION AND ACADEMY

For more than ten years, the Academy of the Association for Savings and Investment South Africa (ASISA) has provided retirement fund trustee education to trustees around the country, identifying the programme as one of the cornerstones of its financial consumer education offering. Its overarching mandate is to provide continuing financial education to participating trustees and fund members by improving their financial literacy and thereby enhancing good governance of retirement funds.

Alicia Davids, CEO and director of the ASISA Academy, says the need for independent, quality trustee education has never been more important or relevant. The Financial Sector Code specifically includes retirement fund trustee education as a component of consumer financial education, and Davids emphasises this by referring to metrics from the Financial Sector Conduct Authority (FSCA) which show that more than 16m working South Africans entrust almost R6.2 trillion to retirement fund trustees as their fiduciary custodians.

In terms of the Pension Funds Act, a retirement fund is required to have at least half of its trustees elected by fund members. The same legislation, says Davids, stipulates that elected trustees must not only attain the requisite levels of skill and competence within six months of appointment, but also retain those levels of skill throughout the terms of

their appointment. Pension Fund Circular 130 “Good Governance of Retirement Funds” adds further emphasis by requiring that retirement fund trustees “…should receive rigorous and comprehensive training on both the legislative

and regulatory framework and governance principles in order to equip them to effectively carry out their functions…board members should be educated on an on-going basis about new matters relating to funds…”

“For most employed South Africans, their retirement fund savings are also their only savings. Historically, however, these savings have all too often been inadequate to maintain a comfortable standard of living post-retirement. This has been caused in part by fund members accessing their retirement savings between jobs and not preserving their savings, as well as suboptimal investment strategies and compliance. The recent introduction of default regulations seeks to address our poor retirement savings culture but financially literate and ethical fund trustees are at the core of optimising retiring fund members’ financial prospects,” says Davids.

With funding provided by the ASISA Foundation, the ASISA Academy offers retirement fund trustee education workshops

that are presented by independent professionals across the country, often in partnership with the Batseta Council of Retirement Funds for South Africa (as accrediting CPD agent) to retirement fund trustees and principal officers.

“Since May 2014, the Academy has delivered in excess of 170 workshops to more than 2 000 delegates from over 50 retirement funds,” according to Davids.

She passionately believes that the ASISA Academy, in collaboration with its strategic partners, has started to achieve impact and effect positive change in this socio-economically critical objective of optimising working South Africans’ retirement prospects – the dreams for which they have worked all their lives.

Since May 2014 to date, the Academy has delivered over 170 workshops to more than 2 000 delegates from over 50 retirement funds.

THE ASISA FOUNDATION AND ACADEMY

The ASISA Academy is the preferred service provider for the ASISA Foundation, which receives grant funding from industry sponsors for retirement fund trustee education (RFTE), thus allowing the workshops to be offered on a fully-funded basis to trustees of South African retirement funds. This pooled initiative arrangement ensures the independence of the RFTE programme from the sponsors of the ASISA Foundation.

THE ASISA ACADEMY’S RETIREMENT TRUSTEE EDUCATION PROGRAMME

The ASISA Academy’s RFTE programme is aimed primarily at trustees of South African retirement funds with an overarching mandate to provide continuing financial education to participants by improving their financial literacy and enhancing good governance of retirement funds. This learning enables and empowers trustees to effectively fulfil their role as trustees, thereby enhancing the retirement prospects of funds’ members and beneficiaries. All of the Academy’s RFTE workshops are formally monitored and evaluated by an external independent agency.

TRUSTEE WORKSHOPS ON OFFER

The Academy’s current suite of RFTE workshops comprises:

  • Investment Fundamentals
  • Retirement Fund Trustee Governance and Ethics
  • Responsible Investing
  • Annual Financial Statement Analysis
  • Investment Policy Statement Formulation and Assessment
  • Employee Benefits
  • Death Benefits
  • Investment Management Fees and Costs
  • Default Regulations

 

ALICIA DAVIDS, CEO: ASISA ACADEMY

 

For most employed South Africans, their retirement fund savings are also their only savings. Historically, however, these savings have all too often been inadequate to maintain a comfortable standard of living post- retirement. This has been caused in part by fund members accessing their retirement savings between jobs and not preserving their savings, as well as suboptimal investment strategies and compliance. The recent introduction of default regulations seeks to address our poor retirement savings culture but financially literate and ethical fund trustees are at the core of optimising retiring fund members’ financial prospects.

 

 

THE WORKSHOP PROGRAMMES

 

 

FULL-DAY WORKSHOPS

(6 – 7 HOURS OF PRESENTATION TIME)

  • Investment Fundamentals
    Economic basics from workings of the SA economy, interest rates, inflation, GDP and exchange rates, through to investment asset classes with associated risks, investment policy formulation, awareness of environmental, social and governance aspects of fund investments.
  • Trustee Governance and Ethics
    Purpose, types and workings of retirement funds, trustee fiduciary duties and responsibilities, principles of good governance, PF 130, applicable legislation and regulatory framework, functions and role players of a retirement fund, fair treatment of fund members, as well as evaluation of ethical trustee behaviour with an emphasis on conflict of interests.
  • Responsible Investing
    The meaning, rationale and drivers behind responsible investment (RI), the relationship between RI and trustees’ fiduciary duty, Environmental, Social and Governance (ESG) issues and objectives, RI policy and strategy formulation and actioning, service provider engagement.

    Employee Benefits
    Role players in a DB and DC retirement fund, fund administration, service level agreements, governance and compliance principles, roles and responsibilities of employers, fund cashflows, withdrawal, retirement and death tax implications and SARS directives, transfers into and out of funds, benefits offered by the fund, income replacement ratios, and member communications.

 

 

HALF-DAY WORKSHOPS

(3 – 4 HOURS OF PRESENTATION TIME)

  • Default Regulations
    FSCA’s purpose behind, and requirements of, the regulations, formulation of compliant investment strategies and portfolios, default preservation and portability principles, annuity types and default strategies, member communication and counselling.
  • Annual Financial Statements Analysis
    Purpose, use and preparation of fund AFS, principles of fund accounting, independent auditor and valuator roles/ reports, trustees’ fiduciary duty and responsibilities in the AFS, assessment of fund accounting policies, analysis of each component of the AFS.
  • Investment Policy Statement Formulation and Assessment
    Purpose and principles of the IPS, investment strategies, asset diversification, life-stage models, investment regulatory compliance, service provider appointment and measurement, targeted returns and associated risk.
  • Investment Management Fees and Costs
    Complexities and calculation bases of investment fees, TCF implications, base and performance fees calculation and monitoring, communication of fees to members.
  • S37C Death Benefits
    Objectives, trustee duties and responsibilities, dependent types and identification, dependents’ financial needs, benefit allocations, spouses, payments, dependent communication.

THE PRESENTERS

To further ensure the independence of the content of the workshops, one of the key requirements of the Academy’s presenters is that they are currently not permanent staff members of any financial services providers. This team of experienced and independent lecturers is available to present the workshops anywhere in Southern Africa with qualifications including a PhD, MBAs, CA (SA), MScs, CFAs and BComs, combined with total trustee education experience exceeding 12 years and investment industry experience of more than 70 years.

BATSETA COUNCIL OF RETIREMENT FUNDS FOR SOUTH AFRICA

The ASISA Academy and ASISA Foundation work collaboratively

with Batseta in that the Academy provides trustee education to Batseta members who, in turn, are awarded continuing professional development credits for completing the workshops.

 

 

THE ACADEMY OFFERS FULL-DAY
AND HALF-DAY WORKSHOPS

DAVID MORRIS, PROGRAMME CHAMPION,
ASISA ACADEMY

 

For further details and information, please contact the Academy’s trustee education programme champion
David Morris on 083 377 9380,
dmorris@asisaacademy.org.za or visit http://www.asisaacademy.org.za/