|In this newsletter:
Benchtest 08.2020, Digital Webinars on FIMA, Digital Benchmark AGM and more...
Based on a meeting that the ICAN Tax Committee had with the IRD in the middle of September, ICAN recently circulated the following updates:
Pension fund governance - a toolbox for trustees
Registered service providers
If you want to find out whether your service providers are registered, or whether you need to establish directly from NAMFISA because the service provider does not appear on the list, use this link...
In ‘Tilman Friedrich’s industry forum’ we present:
In our column 'On fund governance' we present:
In ‘News from RFS’:
In news from the market place read about:
In ‘Legal snippets’ read
As always, your comment is welcome, so open a new mail and drop us a note!
Monthly Review of Portfolio Performance
to 31 August 2020
In August 2020 the average prudential balanced portfolio returned 0.9% (July 2020: 1.7%). Top performer is Stanlib Managed Fund with 2.1%, while Allan Gray Balanced Fund with 0.1% takes the bottom spot. For the 3-month period, NAM Coronation Balanced Plus Fund takes the top spot, outperforming the ‘average’ by roughly 2.2%. On the other end of the scale Allan Gray Balanced Fund underperformed the ‘average’ by 2.7%. Note that these returns are before (gross of) asset management fees.
The Monthly Review of Portfolio Performance to 31 August 2020 provides a full review of portfolio performances and other interesting analyses. Download it here...
Pensioners beware - this is not the time to raise your investment risk!
...When one has been used to the longer-term achievements of the prudential balanced portfolio managers, one can understand that pension fund members and pensioners will be disappointed with the shorter term returns their pension investment will have produced. Tragically, shrewd brokers out in the market have seen this state of affairs as an opportunity to discredit proven prudential balanced portfolios and to coerce pensioners to transfer their retirement capital into high risk portfolios, using shorter-term investment returns some of these managed to produce, as the result of the distortions that occurred in the markets since the global financial crisis...
I strongly advise pensioners, in particular, to be cognisant of the following before taking a decision concerning the investment of their retirement capital:
Read part 6 of the Monthly Review of Portfolio Performance to 31 July 2020 to find out what our investment views are. Download it here...
COVID 19 still has us in its grips!
FIMA webinar series off to a successful start
The webinar training series hosted by RFS in collaboration with Mrs Andreen Moncur (BA Law) series over a period of 6 weeks, kicked off to a successful start on 8 September and will last until 13 October. The webinars are conducted every Tuesday from 14h30 to 16h00. These virtual sessions are covering the standards and regulations, governance, outsourcing, benefit structures, employer liability and cost implications, amongst others. Participants should understand what is needed for retirement funds to be open for business under the FIM Act.
Comments from the presenter after the first webinar
Thanks so much! I really appreciate your support. To the amazing, talented, passionate RFS team, a huge thumbs up and thank you from the bottom of my heart! This was truly a team effort and I am so proud to be associated with the brightest and best in Namibia.”
Compliment from a former fund member
Dated 18 September 2020
As I said, I could poach you to work for us only one thing – your excellent service!!!
Please tell your managers that they are very lucky to have you!!!
Thanks once again!”
Read more comments from our clients, here...
One benefit of investing via Benchmark rather than a ‘platform’
When you consider whether to invest in a retirement product via one of the investment platforms typically offered by insurance companies or in the Benchmark Retirement Fund, take note that the Benchmark Retirement Fund passes on the institutional investment management fees that it pays to its investment managers whereas you would bear retail asset management fees if you invest via a platform.
The trustees of the Benchmark Retirement Fund took a decision to move the assets in the Allan Gray unit trust to a segregated portfolio with Allan Gray. This transfer was effected at the beginning of quarter 3 of 2017.
The fund now attracts a substantially lower investment management fee in the segregated portfolio of approximately 0.6% compared to the institutional fee of 0.75% that applies to the Allan Gray unit trust. This fee differential of 0.15% p.a. improves the capital that will have accumulated over a contribution period of 40 years by 4% - nothing to be ‘sneezed at’!
As an investor via a platform, the retail fee Allan Gray charges is 1.1% as opposed to the 0.6% borne by the Benchmark Retirement Fund. This fee differential of 0.5% p.a. now improves the capital that will have accumulated over a contribution period of 40 years by 15%!
First virtual annual member meeting held
Due to COVID, the Benchmark Retirement Fund held its first virtual annual member meeting via live stream on 10 September.
Whereas past face-to-face member meeting that were held in Windhoek, usually reached only up to 90 people, around 160 people were reached through this live stream event. Presenters were from as far away as France, Cape Town, Johannesburg and Windhoek. While there are limitations with virtual events there are also huge opportunities to reach many more members (also members outside of Windhoek), while at the same time being able to access good speakers from all over the world at relatively low costs.
Feedback from annual member meeting participant
“Well done everyone! A huge shout out and thumbs up to the Benchmark Board and the RFS staff on a fantastic effort at the AGM today. So proud to be associated with this winning team. You guys are the undisputed market leaders in all areas!”
Important administrative circulars issued by RFS
RFS issued the following fund administration related circular to its clients over the last month. Should any client have missed this circular, please get in touch with your client manager:
Sanlam offers conversion of cover to any group scheme member
Sanlam Namibia Ltd is offering a conversion option to all group scheme employees of all employers in Namibia. This offering will allow all group scheme members to convert to a Sanlam Namibia individual life policy upon termination of employment with the particular employer, even if their group scheme is not with Sanlam and/ or does not have the conversion option.
This offer will initially run for a period of 3 months starting 1 September 2020 and ending 30 November 2020 and is subject to certain terms and conditions.
For further information about this offer, click here...
The declaration of health Sanlam requires from a person wishing to take up this offer can be downloaded here...
Private Sector Development Survey 2019/ 2010 – results released
MIT and GIZ decided to conduct the Private Sector Development Survey 2019/20 to gauge business sentiments across a wide range of topics. The survey was conducted between 16 January 2020 and first week of March 2020, and hence before the State of Emergency was declared in Namibia.
A total of 920 businesses were selected randomly from a database of more than 3,900 companies. The sample as slightly adjusted to ensure that regions and sectors are fairly represented. The online survey was supported by telephonic interviews in order to achieve sufficient responses. A total of 383 responses are included in the analysis, but the analysis could not include all regions and sectors due to low response rates. Responding businesses were grouped into micro, small, medium and large enterprises based on the definition provided in MIT’s SME Policy.
Annual financial statements and actuarial reports to be submitted electronically
NAMFISA recently advised that, presumably with immediate effect, - “As communicated at the last industry meeting held on 29 July 2020, the submission of Annual Financial Statements (AFS) and Actuarial Valuation Reports (ARV) should be made via ERS by completing the forms below.
Industry meeting of 16 September postponed
NAMFISA on 10 September advised as follows: “Kindly be informed that the industry meeting which was scheduled for 16 September 2020 has been postponed to the fourth quarter, which will be held on 25 November 2020, as no substantial or pressing matters have been identified for discussion at this meeting.
We will highly appreciate your submissions before close of business on Monday, 14 September 2020.”
Credit Agreements Act amended
If you are interested in what this entails and would like to study the summary of the draft bill, click here...
Tshombe found that Venter failed to act honestly, fairly, with due skill, care and diligence; contravened the general code of conduct for financial services providers; and failed to act in the interests of his client...
Why banks want a return to offices
JPMorgan Chase's decision to call traders back to its New York-area offices has a backstory, per Bloomberg: declining productivity among workers at home. Since the pandemic forced companies to temporarily close their offices, output has suffered at the biggest U.S. bank — especially on Mondays and Fridays, a KBW analyst said following an interview with CEO Jamie Dimon. The analyst said that the dip, along with a loss of "creative combustion" found onsite, was hurting young employees in particular. Less than a week after its workers returned to the office, JPMorgan sent some Manhattan employees home after one tested positive for COVID-19, reported Bloomberg.
3 tips to manage your money and stay sane during the pandemic
“Staying on top of your finances and credit can be stressful as is, but when you add a global pandemic and an economic recession to the mix you may find yourself feeling particularly weighed down...
The pandemic] raises a lot of difficult questions about how to manage our money, what’s the best use of it,” Nicole Iacovoni, a Pennsylvania-based financial therapist, tells CNBC Select. “Everything is so unpredictable; we no longer have that job security and guaranteed, stable income. It’s certainly making people question, ‘How can I be prepared to weather a financial storm?..
We asked Iacovoni her advice on how people can stay on track of their finances while also having peace of mind. Here are her three tips.
Retirement: To those still in employment
Let's plan today!
Great quotes have an incredible ability to put things in perspective.
"I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.”
~ Leonardo da Vinci