During the Annual Member Meeting of the Benchmark Retirement Fund, Danie van Zyl, Head of Guaranteed Investments of Sanlam Employee Benefits, noted that many pension fund members blindly accept the wisdom of trustees whom they do not know, and this can cause problems for all concerned.
We understand the needs of trustees to ensure that the funds they are accountable to are trustworthy, and strive to give security to stakeholders, fund managers, trustees and stakeholders by:
supporting trustees with the knowledge and understanding that helps them to make sound decisions,
reducing the legal liability of trustees, who are legally liable for the quality of the decisions that they make,
providing excellent governance that translates into excellent administration,
providing trustworthy, independent views of external actuaries and auditors,
providing the best possible combination of administrative and technical financial skills to each fund we administer,
offering a transparent, service costing model that is consistent with the FPI’s code of ethics and thus with international best practice,
offering data back-up and disaster recovery matching large financial institution standards,
and providing ongoing reporting to members of the funds that we administer, in order to set their minds at rest.
Our most fundamental value is that a fund, its members, and trustees, deserve the best possible service and security for financial futures. We do not cut corners or expenses to achieve this.
Read the report and download documents and Viresh Maharaj's presentation, here...
As always, your comment is welcome, so open a new mail and drop us a note!
Tilman Friedrich's Industry Forum
Benchtest Monthly 09.2015
In September the average prudential balanced portfolio returned -0.39% (Aug: -0.83%). Top performer is Allan Gray (1.04%); while Momentum (-1.01%) takes the bottom spot. For the 3 month period Allan Gray takes top spot, outperforming the 'average' by roughly 3.5%. On the other end of the scale EMH Prescient underperformed the 'average' by 2.9%.
Don't lose perspective
With information technology having managed to create a network of information flow across the globe, it is commonly accepted that we all suffer from information overload. We are losing perspective and in consequence are exposed to making conclusions and decisions based on a distorted view of developments in global financial markets. Take the following graph:
It depicts the movement of a number of large global stock exchanges. It's a very busy graph despite only covering 6 stock exchanges. But at first sight it may lead one to identify 3 trends. Firstly on the downside, the Nikkei that has not moved anywhere over this period of over 20 years and secondly, on the upside, the JSE Allshare Index that was in a flying mode. But look at the next graph for perhaps a bit more perspective.
Here we have only the Allshare measured against the US S&P 500 that is in the middle of the crowd in the top graph.
Read part 6 of the Benchtest 09.2015 newsletter to find out what our investment views are. Download it here...
Where do SPV's invest?
As most retirement fund stakeholders will know by now, all pension funds are required to invest a minimum of 1.75% and a maximum of 3.5% in unlisted investments by latest 30 September 2015.
The way our legislation (regulation 29 of the Pension Funds Act) has been structured, such statutory investments by pension funds have to be done via a special purpose vehicle (SPV) which must be either a trust or a company and has to comply with detailed statutory requirements over and above those that in any event already apply to companies and trusts. For all intents and purposes the SPV is similar to a unit trust, the much more common vehicle for the individual investor. It pools capital from many different investors (pension funds and other investors) and uses the capital received to invest in unlisted investments.
Similar to unit trusts that have to be managed by a unit trust management company, an SPV has to be managed by an unlisted investment manager (UIM) that has to comply with detailed statutory requirements. The structure of SPV/unit trust managed by a UIM/ unit trust management company is intended to protect the interests of the investors. The capital of investors is ring fenced and the misfortunes of the manager will not affect the moneys of the investors, although poor investments made by the SPV will produce poor returns for the investor. Usually the investments made by an SPV or a unit trust are spread widely amongst different investment objects so that the demise of one investment object will not wipe out the investors capital even though it will impact negatively on his returns.
To put unlisted investments into a more comprehensible perspective, let's first look at where the commonly used unit trusts typically invest. They commonly used unit trusts invest in what is referred to as 'conventional asset classes' such as shares, property, bonds, treasury bills and cash. Investments other than cash and treasury bills are mostly listed on an exchange which means that prices can be determined easily by referring to the relevant exchange where the asset is listed. These exchanges are local as well as off-shore exchanges.
Unlisted investments in contrast are what the term says, not listed on any exchange which means that prices cannot be obtained from an exchange. In practice it is very difficult to determine the prices and it requires experts to derive at what they will determine to be the fair value of the investment. If such an investment were to be sold at valuation date, it is unlikely that the investor would actually obtain the price at which the investment was valued. Of the SPV's that have been approved by Namfisa to date, some invest in shares of companies not listed on any stock exchange, some provide loans to companies and other entities such as municipalities and or invest in debt instruments (i.e. bonds) issued by companies and institutions.
One of the advantages of unit trusts investing in listed companies and other listed debt instruments is that prices are readily available and can be determined exactly on a daily. When one investor invests in the unit trust while another investor withdraws an investment from a unit trust, each investor pays for or receives exactly what the investment was worth at the time and there will be no cross-subsidisation. This is not the case in an SPV where one investor may have invested based on the valuation of the underlying investment. The next day, on which another investor withdraws his investment, that underlying investment is sold at either a significantly higher or lower price. This means that the investor who withdrew his investment would receive either significantly more or less than what the investment had been valued at the day before and the balance between what he received and what it was valued for the day before either accrues to or reduces the value of the remaining investors.
Unfortunately pension funds have no choice in this matter, it being a statutory requirement, and pension fund members are dammed to accept whatever the outcome will be for them.
PN 5 of 2003 broke the system - and no garage in sight
Following the rediscovery of PN 5 of 2003, one feels a bit like being out in the bush and your car has broken down, after you hit a rock also referred to as 'PN 5 of 2003' - no garage in sight and no cell-phone reception! Now you have to improvise if you still want to get to your destination.
There must be hundreds of pending death claims that cannot be finalised based on the decision taken by the trustees. Adult beneficiaries who were awarded a lump sum now have to arrange an annuity from 34% of the capital allocated to them. Many of these beneficiaries will no doubt object to this and try to put pressure on the administrator and or the pension fund to pay out per trustee resolution. So now the adult beneficiary can agree to have an annuity arranged or to enter into a legal battle with Inland Revenue to challenge its interpretation of the law.
If the adult beneficiary refuses to have an annuity arranged, the pension fund can revoke the previous decision to pay all in cash which will in many cases be quite a drawn out process and can lead to delays in the pay-out of benefits. Of course, a decision taken by the trustees to arrange an annuity with a portion of the capital allocated to the adult beneficiary can be challenged by the beneficiary. His/her contractual rights are defined in the rules, so the rules should be amended to protect the fund against a member challenging the decision by the trustees.
In the case of minor beneficiaries who were awarded a lump sum, the trustees would normally direct that the capital is to be paid to the guardian or into a trust for the benefit of the minor beneficiary. Such a decision can now not be executed anymore and will have to be revoked by the trustees of the pension fund. The minor beneficiary will now also have to have an annuity arranged for his/her benefit from no less than 34% of the capital awarded to the minor beneficiary. As set out above, such a decision by the trustees can be challenged by the guardian and the fund is well advised to rather codify this in the rules of the fund.
The next complexity is that there are seemingly no individual life insurance products in the market that offer annuities for persons below majority age that would pay out the remaining capital in case of early death of the minor beneficiary. We have only come across one product provider that offers annuities for minor persons, but these have a maximum term of 15 years. So if trustees intended to provide an annuity income to a minor beneficiary to age 21 or say age 25, the maximum term of 15 years would mean that the only available product provider still cannot offer a solution for persons younger than 6 years. Furthermore, this product provider believes that any annuity payable from capital arising from a pension fund must be payable for life which eliminates the only available option for minor beneficiaries.
A further complexity is that PN 5 of 2003 allows full commutation of a death benefit, if the capital is less than N$ 98,000. For some products offering annuities, the minimum premium is higher than the maximum death capital that may be commuted for cash without the requirement of paying an annuity. This would eliminate all benefits greater than N$ 50,000 but smaller than the minimum premium required by the product provider.
The definition of 'pension fund' in the Income Tax Act does not distinguish between annuities upon retirement and annuities in the event of a member's death. It also does not state what the term of an annuity should be, although Inland Revenue has in various communications expressed its view that an annuity should be for life of the annuitant in the event of retirement. Does this imply that minor beneficiaries should also be paid an annuity for life only, and if the minor beneficiary passes away early, only an annuity can be paid thereafter? Surely this does not make sense and Inland Revenue should pronounce itself on this so that the industry can move forward.
The definition of 'pension fund' in the Income Tax Act furthermore states "...that if the total value of the annuity...which an...other person [widows, children, dependants or nominees of deceased employees]...becomes entitled to exceeds N$ 50 000, not more than one-third of such annuity...may be commuted for a single payment...".
The question now arising is whether upon the death of the annuitant, any balance of the capital applied towards an annuity after the annuitant already commuted one-third for a single payment at commencement of the annuity, must once again be paid as an annuity or can be paid as a lump sum? Inland Revenue pronounced itself in this regard with reference to so-called living annuities or investment linked annuities where it specifically stated that the remaining capital is to be paid in the form of an annuity over a minimum term of 5 years. Does this imply that only an annuity can be paid in the event of the passing away of a minor annuitant? Surely this does not make sense and Inland Revenue should also pronounce itself on this so that the industry can move forward.
We do not necessarily agree with Inland Revenue's view in this regard and have commented on the subtle difference that the Income Tax Act makes between a pension fund and a pension preservation fund. In latter case the Act specifically prohibits the payment of a benefit other than an annuity upon death of an annuitant whereas in the former case this is not so. An important question in this context is whether the payment of the capital balance of an annuitants investment upon his death represents the commutation of the annuity, or in fact a benefit other than an annuity that may be paid tax free in terms of the definition of 'pension fund' read together with the definition of 'gross income' in the Act.
So, the long and the short of this is that no insurer currently offers a solution for death benefits payable to a minor beneficiary. We hope to be able to find a solution soon but in the meantime, minor beneficiaries may be left destitute. For now it means we all have to muddle through and try to find a solution for each claim individually.
Tilman Friedrich is a qualified chartered accountant and a Namibian Certified Financial Planner ® practitioner, specialising in the pensions field. Tilman is co-founder, shareholder and managing director of RFS, retired chairperson, now trustee, of the Benchmark Retirement Fund.
Compliment from a pension fund consultant
“R, thank you very, very much for all your assistance in this regard in getting the SIH information ready for submission in such a short period of time! Again just affirmation of the fact that RFS can always be counted on in delivering service to their clients.”
Read more comments from our clients, here...
Kai Friedrich's Administration Forum
Cheques to be phased out
The Payments Association of Namibia issued a statement to the public of the reduction of the item limit for cheque payments from N$ 500,000 to N$ 100,000 as from 1 February 2016 and has indicated that cheques will be phased out altogether by 31 December 2017. From a practical perspective this means that RFS will no longer issue cheques as from 16 January 2016 for any payments by cheque exceeding N$100,000. RFS will change all client forms currently in use to reflect the reduced limit for payments by cheque of N$ 100,000. We suggest that employers' HR departments make their fund members aware of this public notice as soon as possible in order for members to plan accordingly. As from middle of December 2017 RFS will not issue any cheques anymore.
Many funds are currently still issuing cheques for benefit and other payments, while some employers also still pay contributions by cheque. RFS urges funds and employers to consider moving away from the use of cheque payments altogether as soon as possible.
By moving away from cheques soonest the Fund can control its unclaimed benefits and timely payment of contributions much closer and does not run the risk of contravening the Pension Funds Act 24 of 1956 in this regard.
Where funds' claim forms currently still offer members the alternative to be paid by cheque, RFS will now amend these forms to remove the option of receiving benefit payments by cheques. Payment to members that absconded without having provided bank details for payment of their benefit will present a challenge. Employers are urged to obtain bank account details of all new staff upon joining and to arrange for these details being updated on an annual basis.
Do your conditions of employment dovetail with your fund rules regarding maternity leave?
With regard to absence on maternity leave, fund rules usually state something to the extent that a MEMBER is permitted to be absent on maternity leave as envisaged in the Labour Act, 2007, with either decreased or no remuneration, and that membership of the fund and the benefits and contributions payable shall not be affected by such absence from service.
The employer and the member are thus contractually obliged to continue full contributions to the fund and all benefits shall remain in place. Employer's employment practice is often inconsistent with the rules of the fund. One of two routes needs to be taken. Either the rules must be amended to reflect the conditions of employment or the conditions of employment must be changed to reflect the content of the rules relevant to maternity leave.
The employer needs to be clear whether or not the employee's retirement fund benefits, including the employer contribution towards retirement, should remain unchanged while she is on maternity leave or whether they are to be reduced in line with the reduction in the salary paid by the employer and this should be reflected clearly in the conditions of employment, as well as in the rules of the fund.
From a fund administration point of view, both member and employer contributions can usually be suspended fully; alternatively, only contributions towards retirement by member and employer can be suspended.
We have come across below conditions of employment that appear to adequately cover this situation.
In return for the contributions of the EMPLOYEE as set out in clause 9, the parties agree on the following remuneration structure, based on a cost to company of N$ X:|
1.1 The basic wage, as contemplated by the Labour Act, shall initially amount to N$ Y per month as from 1 September 20__. At the instance of the EMPLOYEE, and subject to the agreement of the EMPLOYER, this amount may comprise of such components as agreed between the parties. All allowances as agreed between the parties remain part of the basic wage of the employee. Where payable in cash or otherwise, the basic wage shall be paid or provided otherwise, monthly before or on the last working day of every month, unless specifically stated otherwise. The granting or otherwise of future increases shall be based on the EMPLOYEE'S individual performance, as well as on the overall financial performance of the EMPLOYER'S business during the preceding financial year. Salary reviews usually take place once a year, effective 1 October.
1.2 Participation of the EMPLOYEE in the EMPLOYER'S retirement fund, based on a pensionable amount of N$ Z per month, contributions totalling N$ Z * x% to be borne by the EMPLOYER y% shall be deemed to the EMPLOYEE contribution. Of this amount a fraction of x% minus y% shall be deemed to be the EMPLOYER contribution for the purpose of maternity leave benefits as contemplated by the Labour Act. The balance shall be deemed to be the EMPLOYEE contribution for the purpose of overtime pay and leave pay as contemplated by the Labour Act. This amount shall be adjusted pro-rata in accordance with any future increase granted by the EMPLOYER as aforesaid.
2. Maternity leave
The maternity leave entitlement of a female EMPLOYEE who has completed at least 6 (six) months of continuous employment with the EMPLOYER, subject to the provisions of the Labour Act, shall be:
2.1 Before her expected date of confinement -
She is entitled to commence maternity leave four weeks before her expected date of confinement, as certified by her medical practitioner.
She is entitled to maternity leave for the entire time from the commencement of her maternity leave as contemplated in the paragraph above, until her actual date of confinement;
2.2 After her date of confinement, she is entitled to -
Eight weeks maternity leave in every case;
In the case of an employee whose date of confinement occurred less than four weeks after the commencement of her maternity leave, the amount of additional time required to bring her total maternity leave to 12 weeks.
During maternity leave, the EMPLOYER shall pay a maternity benefit to the EMPLOYEE, calculated as 40% of the basic wage of the EMPLOYEE, up to a maximum amount equal to the difference between the basic wage earned by the EMPLOYEE immediately before the start of maternity leave, and the benefit cap set by the Social Security Commission from time to time for determining maternity benefits.
In addition, the EMPLOYER shall carry the deemed EMPLOYER contribution towards the retirement fund, medical aid scheme and any other benefit arrangement the EMPLOYEE participated in prior to the commencement of her maternity leave, and shall pay to the EMPLOYEE the total cost so calculated, minus so much as is agreed between the EMPLOYER and the EMPLOYEE, to be paid by the EMPLOYER towards the retirement fund, medical aid scheme and any other benefit arrangement referred to, in respect of the EMPLOYEE during this period. The EMPLOYER shall also pay to the EMPLOYEE any maternity benefit received from the Social Security Commission in respect of the EMPLOYEE.
During the absence on maternity leave the EMPLOYEE shall remain a member of the retirement fund, medical aid scheme and any other benefit arrangement she participated in prior to the commencement of her maternity leave. The EMPLOYEE and the EMPLOYER shall assume responsibility for their respective deemed contribution, as contemplated in 1.2 during such absence, provided that the EMPLOYEE may request that all contributions to the retirement fund, for the purpose of funding the EMPLOYEE'S retirement, be suspended for such period. It is a further proviso, that any additional obligations the EMPLOYER may be required to comply with in terms of the Labour Act shall also be observed by the EMPLOYER."
Kai Friedrich Director: Fund Administration, is a qualified chartered accountant and a Namibian Certified Financial Planner ® practitioner, specialising in the pensions field. He holds the Post Graduate Diploma and the Advanced Post Graduate Diploma in financial planning from the University of the Free State.
RFS and Benchmark history in figures
* Note: excludes GIPF and retirement annuity funds
- 3rd party
Assets (N$ m)
- 3rd party
RFS executive committee
Hannes van Tonder completed grade 12 at Windhoek High School. After school he enrolled for full-time studies at Unam to obtain a B Comm degree. Freshly equipped with his degree he started his career in the pensions industry at United Pension Administrators (UPA) in 1997. During the time he worked for UPA he continued his studies through Unisa to obtain a B Comm (Honours) degree. This not being enough to quench his thirst for knowledge he also enrolled for the Programme in Advanced Insurance Practice at the Insurance Institute of SA (IISA) to specialise further in the pensions industry and was conferred associate membership of IISA. After a 3 year stint in pension fund administration at Metropolitan, Hannes re-joined his 'old UPA team' now operating as RFS in 2004 and can now look back on 18 years pension fund management experience. Hannes is responsible for the administration of the Benchmark Retirement Fund and also oversees the administration of our largest stand-alone fund that houses all local authorities in Namibia.
Hannes believes our clients should be able to associate with our slogan - Rock solid fund administration that lets you (our clients) sleep in peace. He enjoys working for RFS because of the family notion and because the shareholders are also actively involved in the business together with staff to ensure that our clients are kept happy.
RFS sponsors equipment for Elnatan
Aliza Prinsloo, RFS staff member and mother of Elnatan Private School student Zian recently handed over sophisticated tools to Mr N Lubbe, head of the vocational education department of Elnatan Private School in Stampriet.
Mobipay joins Benchmark
The Benchmark team extends a hearty welcome to Mobipay as new participating employer with effect from 1 November 2015, and to all its employees and looks forward to providing an exceptional experience in client service to this group. We are looking forward to you and us together moving from strength to strength in the years to come!
News from Namfisa
Namfisa scoops top honours
At the occasion of a recent breakfast awards ceremony held by Deloitte in conclusion of its annual Best Employer to Work For survey, Namfisa was awarded top honours as Best Employer to Work For in the medium sized company category. We congratulate Namfisa on this prestigious achievement!
SIH for quarter 3 of 2015 due soon
All funds are reminded that the Excel based SIH (statement of investment holdings) is due for submission to Namfisa by 31 October 2015. Interestingly, the 'request for submission' confirms that this statement is not required to be audited, yet it threatens penalties for incomplete and inaccurate submission that will be applied from 1 November until the date the corrected report is resubmitted. Note that the report format is not a carbon copy of the previous report format but has been amended slightly once again.
Circular on unclaimed moneys
PI/PF/DIR/07/2015 - 'Prohibition against the reversion of unclaimed moneys/benefits to the fund' was issued on 30 September 2015. In short this circular directs as follows:
Trustees to make concerted effort to ensure that persons entitled to benefits receive their benefit;
Moneys which remain unclaimed may not revert to the fund but must be deposited in the Guardian's Fund within the period set out in the rules but not later than 5 years after the day on which the benefit became payable;
The procedures set out in section 93 of the Administration of Estates Act ('AE Act') are to be followed for benefits that have remained unclaimed for 5 years or more.
It is to be noted that the directive in the second bullet is inaccurate. The AE Act directs that an advert is to be placed in the Government Gazette during January of a year in respect of any moneys that remained unclaimed for 5 years at 31 December of the preceding year. If these moneys remain unclaimed after 3 months from date of publication, the moneys are to be deposited in the Guardians Fund. Therefor the moneys cannot be deposited "...within 5 years after the day on which the benefit became payable..."
It is to be noted further that while the AE Act refers to a 5 year period, the circular provides for any period shorter than 5 years, subject to this being set in the rules of the fund.
Funds to report on unclaimed benefits
'Hot on the heels' of the NAMFISA circular on unclaimed money referred to in the preceding article, NAMFISA issued another circular plus a reporting template requiring all pension funds to provide pretty detailed information about their unclaimed benefits as at 30 September 2015, by 31 December 2015.
But what is actually an unclaimed benefit? This is not defined in the circular but it can only be a benefit defined as an unclaimed benefit in terms of the rules of the fund, where there is no real standard in the industry and each fund applies its own definition, or latest when a benefit remained unclaimed for 5 years.
This circular again comes as a (Christmas) surprise to the industry as it has never been discussed with industry stakeholders. As has become NAMFISA standard terminology, it does not go without the threat of a penalty of N$ 500 per day of late submission.
This time of the year, all funds are closing their annual meeting schedule with a last meeting for the year either in November or early December. Once the schools have closed early December, just about the whole of Namibia has booked their annual leave and most businesses will work on skeleton staff.
As for the penalties NAMFISA threatens to invoke, we do not believe NAMFISA has the powers to raise any penalties in this regard. There is no legal requirement to maintain the information that funds are now required to report on. It is therefore likely that funds may actually not be able to provide of the information required by the template.
In previous instances the Retirement Funds Institute of Namibia (RFIN) was urged by its members to obtain legal advice with regard to the limits to NAMFISA's powers to impose penalties for any and every bit of information it is requesting funds to provide. Unfortunately nothing happened to date and funds will have to bend over once again for another hiding.
SA PFA orders death benefit payment despite time barring of complaint
The Pension Funds Adjudicator has ordered the Mineworkers Provident Fund to investigate and pay a death benefit although a complaint was time barred as it was received out of the prescribed time limit.
The respondent submitted it was almost 14 years since the deceased had passed away and although the complainant said she claimed the death benefit in 2004, there were no records to prove that she lodged a claim before the expiry of the prescribed three-year minimum period permitted in terms of the Act, in order for her complaint to be investigated. The respondent said that upon receipt of the complaint, it carried out a detailed investigation and discovered that certain documents were outstanding and delaying the process of finalising the claim. The respondent also submitted that it required confirmation whether or not the deceased was maintaining his mother. However, the PFA said the board had 12 months to identify the dependants of the deceased and allocate and pay a death benefit. The respondent submitted that it does not have record of this claim. However, the respondent should be aware of the death of the deceased as he was its member.
According to the PFA, the board failed to investigate the matter in terms of the section 37C of the Act. She added that more than 14 years had passed with the respondent not having completed its investigation.The PFA ruled that the respondent failed to provide a satisfactory explanation as to the delay in the investigation and ordered the respondent to complete its investigation and proceed with the allocation and distribution of the death benefit.
(for stakeholders of the retirement funds industry)
The psychology of investing in volatile markets
"Individual investors have a tendency to be caught up in the emotion of the moment, particularly when losses start to mount. We all know that fear and greed drive the markets - for example, bias, greed or overconfidence may see investors holding a position for too long, while the fear of loss may cause them to sell at too low a price, or exit the market too soon. In their eagerness to make money (or not lose money), they ignore some of the red flags they would pay attention to if they followed a more analytical approach, as institutional investors tend to do.
Increased market volatility leads to emotional responses like fear or jubilation, leading us to make mistakes and acting when we frankly shouldn't, says Simon Brown, seasoned trader and director of JustOneLap. Many of the decisions we make on a daily basis are informed by intuition and we may not always realise this, or allow the realisation to inform our behaviour."
Here are some of the key points made in this article:
An investor should ideally not bring emotions into play at all;
A good investment strategy is to read your own feelings rather than simply act on them;
An investor with a passive long-term holding isn't worried about short-term noise;
Showing a preference for a known rate of return over a potential rate of return, even if that known rate of return is lower is not wrong - in fact, it will prevent huge losses - but investors should know that any rewards will obviously be limited.
On the plus side, an instrument with downside protection "will help nervous investors sleep better at night";
While it is obviously not possible to predict what the markets will do tomorrow, it is possible to analyse how markets have performed today in assessing the likelihood of their performing similarly tomorrow.
Read the article by Investec Bank in Cover of 15 October 2015 here...
Have fund managers been crying wolf?
"For the best part of three years, market commentators and analysts have cautioned that investors need to moderate their return expectations going forward. And for the most part, markets kept on running...Eventually this record becomes stuck and everybody stops believing it, he says. I think the challenge for investors is that this is a story that we've been telling them for three years and they now ignore us because they think we have been wrong." ...Wood says it is important to look at the performance through the cycle and not to base investment decisions on a one-year picture. Some balanced funds have even underperformed cash over the last year. In the long run, investors may reasonably expect to get a return of CPI plus 5% from a high equity balanced fund, but in the short run there may be periods where returns are below inflation, or even negative, he says."
Read the article by Ingé Lamprecht in Moneyweb of 13 October 2015 here...
Is it still sensible to invest offshore?
"The depreciation of the rand over the last few years has been a welcome return booster for South Africans with offshore investments. However, with the currency under severe pressure against the dollar on more than one occasion during the past few weeks, concern has mounted. Some investors have suffered considerable financial setbacks when the rand previously recovered from levels of around R13 to the dollar in the early 2000s and they are worried that history may repeat itself... Sewnath says the current rand exchange rate is often one of the main reasons investors are skittish to invest internationally, but that is not the only factor that should be considered. First and foremost, investing offshore provides diversification benefits, which help to reduce the risk in the investment portfolio, he says."
Read the article by Ingé Lamprecht in Moneyweb of 13 October 2015 here...
(for investors and business)
5 Psychological hacks for the right mobile notifications
"Consumers have many a time been let down by empty promises and faulty products. This is the reason why they refuse to believe whatever they see or hear. They are scared of being sold out. However, our experience at TargetingMantra goes to show that, as marketers, if we can get to people's minds and embed our reliability and trustworthiness then selling anything is possible."
Here are the 5 'hacks' referred to:
The helping hand effect - As humans, when in trouble, we seek the nearest possible source for help. In the case of eCommerce, the helping hand effect can be used to deliver exceptional customer experience.
The superpower effect - People do not like to be bound and giving them the power to choose what they like creates a two-way understanding. The trick is to lay out options in front of people and let them choose what they please.
The scarcity effect - Our minds are programmed in such a way that when resources are limited, they suddenly become more attractive.
The in-crowd effect - People tend to trust something that receives a positive review from a large like-minded group. The large number makes them feel safe.
The illusion of truth effect - When a message is repeatedly seen or heard by people, a sense of truth about the same is imprinted in their brain. This imprinted message leads one to believe that the message is true.
Read the article by Saurabh Nangia on Linkedin, here...
This e-mail strategy will shave years off your life
"Read a morning routine or two, and you'll see the shame associated with admitting that you read email first thing in the morning. Many of us do it, and many of us feel we shouldn't."
Here is some good advice on how you should deal with e-mail:
E-mail is best done in bulk. Switching between tasks can effectively (!) help you lose up to 40% of your productivity. Avoid this by doing one thing at once - like email.
E-mail is best done when you have less energy, not more. Times of peak energy should be used for the most difficult things on your plate, and those that require intense focus<>.
Think of your email in terms of four categories, and attend to each category accordingly.
Urgent - These are emails to respond to, well, urgently. Here the author distinguishes between 'life projects', 'life changers' and 'inner circle' e-mails.
Daily - Respond to these in bulk on a daily basis.
Weekly - Respond to these in bulk on a weekly basis.
Never - Do not respond to these.
Read the article by Claire Diaz-Ortiz on LinkedIn here...
Small improvements that can transform your professional life
"Ultimately every job, even a "creative" job, is inherently a production job. Speed, quality, efficiency, cost control... the best performers in any role work faster and do better work. Productivity always matters... And that's why the best performers - knowingly or not - adopt continuous improvement techniques to streamline their own tasks and de-clutter their own workdays."
Here are a few simple techniques to free up your time and sweep away some of the clutter:
Decide who will decide. Placing authority and responsibility where it belongs is a hallmark of any productive work environment.
Eliminate unnecessary decisions. Decisions take time. Decisions can be incorrect.
Take a regular step back. Methodologies like Toyota Production System include scheduled meetings to review past performance and brainstorm potential improvements.
Use a realistic to-do list. Your daily punch list probably includes twenty or thirty items. That isn't really a to-do list. It's a wish list, because you'll never get all of those things done.
Read the article by Jeff Haden on LinkedIn here...
Don't underestimate the power of offbeat employees!
"There won't be the scarcity of imperfectly perfect employees in the organization. Just like the odd one out, they stand out in the crowd. Should they be removed to make the picture perfect or should the picture be altered to give them special position. Smart leaders never judge a book by its cover page. Though they know there are off-beat employees that can manipulate the company culture, they treat them uniquely to get the best out of their talent."
How are the odd ones out different?
They are exceptional - Many enterprises miss great talents just because they were incapable of identifying and leveraging the uncommon talent. It's hard for companies to grow without such offbeat employees that may seem to be useless but actually they are the assets to be preserved.
They are the pathbreakers - They are basically the influencers that unknowingly influence their colleagues.
How should they be treated? The strategies to manage them will have different pitch and evaluation methodology.
They hardly care about their job description - Work should speak rather the behaviour, discipline and working style. They always tend to help their fellow-workers even if it's not their job.
They praise their colleagues - Such employees never give a second thought when they decide to praise someone at work.
They avoid complaining - Such people do not complain about what's going on in the company; they keep themselves busy in their work as if nothing matters to them except work.
Read the full article by Amid Shah on LinkedIn, here...
"The trust of the innocent is the loiar's most useful tool."
~ Stephen King