In this newsletter:
Benchtest 07.2012, a new client joins Benchmark, Namfisa industry meeting, two interesting case studies, media clippings and more...
News from Namfisa
AUGUST UPDATE: New reporting requirements
Namfisa recently arranged a meeting with pension funds on the topic of its new reporting requirements that was well attended. A follow-up meeting is scheduled for 25 September, starting at 8h30, venue still to be announced. Confirmation of attendance due by 11 September. We encourage our clients to ensure that their fund is represented.
Law and legal snippets
The Flexible Land Tenure Act, 2012
With ever increasing house prices and the problematic registration of person’s right to land in informal settlements, this act creates two alternative forms of land title that are simpler and cheaper to administer and provide security of title for persons living in informal settlements and who are provided with low income housing. RFS legal consultant, Sabine Halberstadt provides a technical analysis of this new law here...
Case Study – FJ Fuller v GG Umbrella Pension Fund
The issue in this case is the date at which the benefit amount of an exited member is to be determined where it is linked to market returns. The adjudicator held that the fund must act according to its rules and not to administration practice, where the fund rules establish that the exit benefit is to be determined as at date of termination of membership, i.e. not at date of disinvestment or receipt of the withdrawal form.
Case Study – S Makamela and MI Matekane v SAMWU Provident Fund
The issue in this case is that the insurer refused to accept a death claim due to late submission of the claim to the insurer. The rules contained the proviso that the death benefit is subject to approval by the insurer. The adjudicator ruled that the employer was liable to compensate the dependants of the deceased member.
Read more on both these cases here...Interesting media snippets
Retirement benefits likely to be far lower than projected
10 years ago
It is fairly common practice in the retirement funds industry for product providers and intermediaries to project retirement benefits to assist investors with their financial planning. Such projections are always based on assumptions regarding the course financial markets will take. Over the past 10 years, the investment environment has changed substantially and inflation, interest rates and investment returns today are no longer what the investor became used to. As the result, past benefit projections are likely to be substantially higher than what the actual benefits will turn out to have been.
John Anderson, head of research at Alexander Forbes, urges members to seek advice to see if they are still on track for a comfortable retirement in the article here...
And while we are on this topic please visit our website to access our pension calculator.
Limiting the need for advice will greatly improve the retirement savings outcome
While the above article cautions about lower retirement benefits, another article corroborates our opinion that retirement fund structures have been made ever more and unneccessarily complex at a cost to the member that has never been weighted up against any prospective benefits. Download the article here...
Does more money mean more happiness?
In this article in Moneyweb of 20 August, column writer Felicity Duncan provides an interesting insight into the relationship between more money and more happiness based on international studies, and suggests other pillars one should build on to achieve greater happiness.
Some well-considered reservations about BEE
In this article that appeared in Fin24, ANC Secretary General Gwede Mantashe provides food for thought, when explaining some serious issues he has with BEE in South Africa.
Glacier publishes consensus view of SA asset managers on investment markets prospects
The Bull & Bear report that is produced from a survey conducted by Sanlam’s Glacier Research, collates the performance expectations of leading South African Asset Managers over the coming 12 months. Asset Managers are asked to comment on expected performance for various asset classes and sectors, currency levels, commodity prices and the performance of selected global markets. These viewpoints are subject to change in line with changes in economic and market conditions. Download the article here...