For RFS, 2016 was a year of mixed fortunes. On the down side, we unfortunately lost our appointment as administrator to 2 of our prestigious clients. Both funds went out to tender during 2015, after RFS had been serving them for 15 years. Both funds were in ‘administrative distress’ when we were appointed in 2001 and both have never looked back since they had the courage to engage that new kid on the block called RFS, soon after the company was established. In both cases, however, corporate memory of painful experiences preceding our appointment in 2001 has faded over the years through changes to the composition of the boards of trustees. Where price at the time was rated second to service quality and reliability, these considerations were ostensibly no longer considered imperative. The dilemma of trustees is how to weigh up cost against quality of service. Bad experience cannot be corrected at any price!
On the positive side, RFS was re-appointed by 9 clients since 30 June 2015, following their regular review of service provider mandates. This record speaks for itself, is testimony to our reputation in the market and the trust and confidence our clients have in our capabilities. We are extremely proud of this achievement and of course also extremely grateful to these clients! At the same time we are humble and appreciate that clients expect to receive value for their money. For this we have to continue going the extra mile to meeting our clients’ expectations.
RFS has no intention to be the largest player in our market but has every intention to be uncompromising in its pursuit of delivering a service of the highest standards!
As far as the Benchmark Retirement Fund, our unique house brand, is concerned we have expanded the range of products available in the fund in response to the challenge posed to pension funds by Inland Revenue’s new interpretation of Practice Note 5 of 2003 and in anticipation of what impact the National Pension Fund and the FIM Bill is likely to have on stand-alone pension funds. In addition we have introduced an innovative living annuity product that will assist pensioners to manage their income in retirement sustainably and to manage market volatility in an innovative manner.
For the past year-and-a-half we have invested substantial resources in having the MIP administration system developed to support our efforts of delivering an advanced and superior service experience to our clients. In 2017 RFS is set to turn over a new leaf in its history with the migration from the Compen administration platform to the MIP administration platform, a state of the art web-based system that will assist us in meeting the ever more technology driven needs of our clients and the market.
Besides our challenge to convert all clients to MIP the regulatory environment will no doubt pose a number of challenges to retirement funds and to us as administrator of funds. Here we are referring to the National Pension Fund that SSC aims to launch in 2017 and the FIM Bill that NAMFISA aims to have enacted in 2017. These laws will no doubt introduce incisive changes to the retirement funds industry and are likely to lead to the demise of a number of retirement funds.
In the light of the large slice government and its SOE’s already represent of the Namibian economy and the financial distress that government is experiencing, it is concerning to the private sector that government seems intent on taking over an ever growing slice of the economy through the establishment of more and more para-statals that are all siphoning off revenue that could have ended up in in government’s coffers. These SOE’s to a large extent operate in a protected environment that suppresses the free market mechanism of allocating resources and promoting competition for the benefit of the consumer. Hardly a month goes by without the announcement of the establishment of yet another SOE. Can Namibia afford this?