In this newsletter:
Benchtest 10.2015, the administrator's job, absence from work, payment by cheque to be abolished and more...
In Namibia, there are currently no legal impediments for offering services as fund administrator. How can a board of trustees then be comfortable with the credentials offered by their administrator and how can trustees weigh up the cost of administering their fund against the risk mitigation factors their administrator offers?
Justifying their decision based purely on costs, a board of trustees recently expressed its view that the fund does not need to drive an expensive car but can also drive a cheap car. But is this an appropriate logic when you are dealing with trust money that represents the retirement nest egg of hundreds of members? We certainly believe this argument will not stand any board of trustees in good stead should their judgement ever be placed on a test bench.
Good governance comes at a cost but should at the same time serve to mitigate the risk a board of trustees faces. Applying proper risk management principles a board of trustees should really determine the net cost of the service provider, which is the cost charged to the fund minus the quantified benefit of any additional risk mitigation offered. Comprehensive and transparent reporting is the most important tool trustees can rely on to monitor the state of administration of their fund.
A due diligence questionnaire for fund administrators that trustees are duty bound to employ before appointing an administrator, should cover the following key areas:
How does absence from work affect the employer, the fund and the member?
Inland Revenue no longer accepts cheques
Let’s hope Inland Revenue will be able to keep its systems up-to-date throughout so that taxpayers do not get hammered with penalties and arrears for payments made but not reflected on their account due to processing delays.
NAMFISA’s approach to the face to face meetings would be to:
Withholding tax on services is currently payable at a rate of 25% (to be withheld by Namibian resident from payment to the non-resident). However, this rate is due to be reduced to 10% except on directors’ fees and entertainment fees.
Read the article by Jeff Haden in Linkedin of 17 September 2015, here...
In almost every situation I can imagine - short of an all-out crisis - a bit of playfulness makes a person more charismatic.”