| EFACTS:
Electronic Fund Administration Compliance and Tracking System
CORPORATE
GOVERNANCE AND RETIREMENT FUNDS – A NEW ELECTRONIC TOOL FOR
TRUSTEES
The maintenance of a retirement fund is actually
very similar to the maintenance of a motor vehicle. As we all know,
a motor vehicle is an operating system comprising of the mechanics
and electronics, and of course a body. More and more product providers
are raising the level of electronic sophistication, based on generic
technology that is developed by specialists and made available to
anyone who might be interested. When you buy a luxury car in Namibia
today, electronic faults are often diagnosed and can even be fixed
by a computer that is likely to be located anywhere else in the
world but in Namibia. So we don’t really have to have specialists
here in Namibia to maintain the electronic system. But when it comes
to the basics of maintaining the mechanical system, you would really
have a problem if there was no one here to do this for you. What
we need are persons that know and understand the Namibian environment,
be it climate, geology, economy or legislation, while experience
will be an important requirement to keep the mechanical system going.
This is the basic premise that industry leader Retirement
Fund Solutions business model is based on, namely to focus on the
basics of keeping your retirement fund going and it prides itself
of employing many of the best qualified and most experienced staff
available in its field of business in Namibia.
When it comes to sophisticated technology, this
can be acquired and can be maintained anywhere in the world, but
it must be appropriate to be functional and to make this assessment,
its staff is in the best position to make that call.
In the line of technology Retirement Fund Solutions
is busy installing and testing a sophisticated Electronic Fund Administration
Compliance and Tracking System, a first for Namibia, which will
also be made available to other retirement funds in Namibia.
Since the ultimate responsibility for a retirement
fund, within a very strict statutory regime, rests with the trustees
who rely on the various parties to the fund to perform certain contracted
duties, they can never abdicate from their responsibilities. What’s
worse, they can even be held responsible in their personal capacity!
Due to the involvement of so many different service
providers, it is impossible for the trustees to be totally in control
of all the processes of the Fund and any non-compliance is usually
only discovered long after the event, if at all.
For instance, a new member record must be created
for every new employee while every person whose employment is terminated
for whatever reason, must be exited and must receive his or her
benefit in time. The employer is, under legal sanction, required
to pay the monthly contributions for every employee in time. Surplus
funds must be invested in time and when more has to be paid out
than what was received in any month, a portion of the fund’s
investment must be realised to cover the excess expenditure. Rules
must correctly reflect the benefits offered by the fund and must
be approved by Namfisa and Inland Revenue, for the employer and
its employees to enjoy the tax concessions and statutory approval
that are applicable only to approved retirement funds.
Up to now there were no claims or contributions
tracking or performance monitoring systems in place that trustees
and principal officers and any other stakeholders have access to.
This leaves trustees very exposed.
The problem is that there is no mechanism or conduit
currently in place whereby the trustees can monitor, on a real time
basis, as to whether the various Parties to the Fund are performing
their duties in terms of the fund rules, the legislative environment
and in terms of service level agreements. In other words, although
trustees are ultimately responsible for all these processes, they
have not, as yet been provided with any means to monitor these business
transactions on a daily basis.
The system now being installed and tested by Retirement
Fund Solutions is designed to provide trustees with the means to
actually be ‘in charge’ of the affairs of their fund.
This system is first and foremost a technological platform and an
independent agent that forms the conduit between the key service
providers to the fund. In effect it is an ONLINE, INDEPENDENT, FUND
ADMINISTRATION MONITORING AND COMPLIANCE SYSTEM. It is the first
to give employers the convenience of transacting electronically
with Retirement Fund Solutions as administrator of their fund, with
all the convenience that this brings, including: tracking, diary,
query facilities, transactional archive, data warehousing, payment
balancing, member data balancing, non-compliance alerts, and more……..
So, instead
of the various parties to the fund transacting exclusively with
each other, the system creates a central platform and data warehouse,
with built in compliance, governance and service level measurements
to alert and make trustees aware of the state of business transactions
within the entire fund environment at any time. The other service
providers, i.e. investment managers and the auditor are provided
with reporting facilities.
For more information, e-mail
Charlotte Drayer, Marthinuz
Fabianus or Tilman
Friedrich .
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