We have prepared a summary of what Namfisa is envisaging all funds to report on a quarterly basis, according to the latest draft that can be downloaded here...

Urgent action is required
Principal officers are advised to study these requirements in detail. These requirements are a tall order to be complied with on a quarterly basis and it will be another nail in the coffin of any fund that cannot afford to employ a full time principal officer! This should become abundantly clear from a study of these requirements. Since Namfisa apparently is not prepared to entertain any comment the industry must deliberate on how to approach this challenge as a matter of urgency. We believe that as a ‘rule of thumb’, funds with less than 1,000 members will find it difficult to comply with these requirements. This could result in the number of private pension funds be cut down from around 90 to not more than 12.

Cost for members likely to increase by 20%

As we commented in our previous newsletter, trustees are put under ever increasing pressure and trusteeship will soon become so onerous that funds will be forced to employ full time trustees. Being able to afford a full time principal officer will no longer suffice and this is likely to further reduce the number of employer sponsored funds that still can afford such an expensive structure to possibly only 2 or 3, outside the GIPF. The management costs per member per month can be expected to rise substantially. We believe that the additional cost burden per member per year that will result from these requirements can easily amount to between N$ 150 and N$ 250. Considering that current cost per member per annum is somewhere between N$ 800 and N$ 1,200 per annum, the severe impact of these new requirements should be of serious concern to funds, their members and Namfisa!

Principal officers need to take action
We suggest that principal officers sensitise their relevant service providers to start gearing up for providing this information and to set up the contractual framework for providing these services to the fund.

A substantial amount of detail required to be reported on will have to be provided by pension funds’ asset managers. On behalf of our clients, we have already made all asset managers aware of the prospective quarterly reporting our mutual clients will be required to submit to Namfisa. We have forwarded the latest template of this quarterly report and have requested the managers to consider section 3 detail that mutual clients will require from their asset managers. We have requested managers to gear up for assisting our clients in this regard. We have suggested to these managers to advise our clients of any concern in this regard and to raise any issues they believe need to be taken up by any institution or association in the interests of industry stakeholders in good time. To date we have not received any feedback.