Dear Reader
Basis Point Newsletter August / September 2008 - Part 1
Not to overwhelm our readers, we have decided to break up the latest newsletter into smaller, digestible portions and will circulate these over the next few weeks. Make sure you don’t miss out on any one of them.
In this edition of our newsletter we will deal with the following topics:
- RFS welcomes its new clients and staff
- The Financial Institutions and Markets Bill
In the following parts we will deal with these topics:
- Prudential launches new balanced unit trust
- Registration of rules and rule amendments by Namfisa
- Withholding of benefits
- Redemption of loans upon disablement or divorce
- Regulation 28
- The retirement funds industry in perspective
- The Retirement Funds Institute – Quo Vadis?
- Does your fund have a strategy?...
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| 1. |
RFS welcomes its new clients and staff
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First and foremost, RFS is proud to announce the new appointments it has won effective 1 July 2008. We welcome the following new clients, their members and pensioners most heartily:
- The Retirement Fund for Local Authorities and Utility Services in Namibia;
- FNB Namibia Holdings Retirement Fund;
- Namib Mills Retirement Fund;
- Dutch Reformed Church in Namibia Pension Fund;
- Wilderness Safaris;
- Free Press of Namibia (The Namibian);
- Hollard Insurance Company;
- FNB Insurance Brokers.
Between these funds and Benchmark participants, our assets under administration grew by N$ 2,2 billion to around N$ 6,4 billion, active members increased by more than 7,000 and pensioners by 1,500. This gives us our target market share of around 25% of the market excluding the GIPF (of course). We are sincerely grateful for the opportunity afforded us to prove ourselves to these prestige household names, and we look forward to a long and mutually satisfying relationship!
We successfully passed the first major hurdle when our new pensioners received their first pension for July in time! The next hurdle will now be to update the active member data base for July, and we are working very hard to cross this hurdle with honors too!
Without a great team this would not be possible and we were extremely fortunate to expand our skills and experience significantly in good time. We now wish to extend a warm welcome to our new team members:
- Maria Texeira serving individual Benchmark members with immediate distinction;
- Ujama Karamatha, the pleasant voice on the telephone;
- Stefanus Morris, enjoying it more every day to serve our Benchmark employers;
- Anita Keibib, taking over from Rauha Shivute on the accounting side with great dedication, where Rauha decided to now learn the ropes of fund administration as well;
- Renelyn Mclune, responsible for projects such as the take on of Local Authorities, FNB and Namib Mills – as if she has never left our industry;
- Aliza Prinsloo, keeping our new pensioners happy and making a great contribution to the office spirit;
- Agnes Brockerhoff, resolutely taking charge of Local Authorities’ financial records and what ever else comes her way;
- Anna Willemse, quietly but determinedly strengthening our financial capacity on Benchmark.
Of course we look forward to have you around for many years to come! And, by the way, Ingrid Lindinger decided not to disappear into retirement after all but still is very much part of our team!
And finally we bid farewell to Roads Authority and express our gratitude for the opportunity to show our capabilities. Unfortunately we were unable to reach a mutually acceptable agreement on the way forward.
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| 2. |
The Financial Institutions and Markets Bill
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Namfisa presented the first draft of the Financial Institutions and Markets Bill (FIM Bill) towards the end of May and invited all effected industries to submit any comments on by 15 August. This Bill encompasses 17 chapters in over 400 pages and proposes to combine 9 separate acts in a single act.
We believe for most of our retirement fund clients, this is a tall order for any fund official who has a full time occupation different from the business of their fund. On the other hand, this Bill will have a major impact on our industry and your fund and hence there is a need for funds to comment and not to leave it only to service providers.
For the sake of background, a broad spectrum of role players from our industry, were involved in a technical committee a few years ago to draft a new Retirement Funds Bill. Many, many hours were spent by this committee and many new concepts were formulated. In our view this committee was based on true consultation of local role players and the end product was based very much on the Namibian environment and our specific problems and constraints. The new Bill was drawn up by Namfisa, assisted by South African experts, in isolation, over a period of a few years.
We have already submitted our general and more specific comments to our institute. In the following exposition we will try and highlight the more important areas that our clients should be aware of. This should allow you to focus on these issues and to express your own views.
The Bill distinguishes between ‘prudentially regulated financial institutions’ and other ‘financial institutions’. The following fall under the former definition:
- securities depository, securities clearing house, exchange, settling party, stock broker, authorized user, participant or nominee;
- friendly society;
- long term insurer or reinsurer;
- short term insurer or reinsurer;
- medical aid fund;
- collective investment scheme, manager, trustee, nominee company, custodian;
pension fund organisation;
- deposit taking micro finance institution debt administrator;
- hedge fund or any person concerned with the management of such fund;
- private equity fund or any person concerned with the management of such fund.
Other financial institutions are:
- financial service provider or a representative;
- an auditor;
- an actuary;
- a debt collector;
- a debt administrator;
- a debt consolidator;
- a credit bureau, credit provider or debt counselor;
- any person who deals with trust property;
- an entity declared a such by regulation;
- any person who renders financials service of a kind set out in the afore going bullets.
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| 2.1 |
Principles relating to the FIM Bill |
| 2.1.1 |
The Financial Services Laws Amendment Bill is tantamount to a revolution in the financial services industry in Namibia. There will be absolutely no certainty in anything that is being and will be done in the financial services industry anymore, and this situation will prevail for many, many more years. If passed in its current form, it will result in much of established principles, practices, processes, legal precedent and procedures, that evolved over close to a century being destined for the waste bin. So will much of the acquired skills and experience, and the question begs to be asked, can Namibia afford this? |
| 2.1.2 |
The Bill for all intents and purposes transfers a significant portion of legislative powers from the legislature to the ‘authority’. The extent to which power will be entrusted to the chief executive office is frightening. These powers will have to be managed, undoubtedly at significant additional direct costs, and even higher indirect costs, to be regulated, the industry. Has any study been carried out on this aspect? |
| 2.1.3 |
The person on Namfisa side that was responsible to compile this Bill invited all interested parties to comment and appears to be the person receiving and processing comments submitted. From a governance point of view, we question this principle and believe that this is likely to impede objectivity. |
| 2.1.4 |
Service providers as much as their pension fund clients are all in a full time occupation and any time to be spent for the benefit of the industry, generally has to be spent after hours. The FIM bill with its over 400 pages is simply overwhelming and it will be difficult to give any meaningful inputs within the time schedule determined by Namfisa.
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This was the first part of the August / September 2008 series of this newsletters. Watch for the next three issues in the e-mail.
Regards
Tilman Friedrich
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Important notice and disclaimer
Whilst we have taken all reasonable measures to ensure that the results reflected herein are correct, Benchmark Retirement Fund and Retirement Fund Solutions 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 having confirmed the detail with the relevant portfolio manager.
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