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| Issued January 2025 |
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| In this newsletter... |
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Benchtest 12.2024 – tax-free investments, a new start of the FIMA and more... |
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| IMPORTANT NOTES AND REMINDERS |
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NAMFISA levies
- Funds with December 2024 year-ends must submit their 2nd levy returns and payments by 24 January 2025;
- Funds with May 2024 year-ends must submit their 1st levy returns and payments by 24 January 2025;
- and Funds with January 2024 year-ends must submit their final levy returns and payments by 31 January 2025.
Repo rate unchanged in January
The interest rate on funds’ direct loans and repayments remained at 11% for January 2024.
Registered service providers
Certain pension fund service providers must register with NAMFISA and report to NAMFISA. Download a list of service providers registered as of June 2024, here... |
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Retirement calculator
Use our web-based retirement and risk shortfall calculator for your personal retirement planning. Find it here...
If you need help with your financial planning, get in touch with
- Annemarie Nel (tel 061-446 073)
- Christina Linge (061-446 075)
- Dennis Fabianus (061-446 098)
Toolbox for trustees
RFS provides comprehensive support for trustees. Find a list of download documents to assist with governance and management of private funds, registered as of June 2024, here... |
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| IN THIS NEWSLETTER... |
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In this newsletter, we address the following topics:
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Read the New Year message to RFS stakeholders in ‘A note from the Managing Director’. In 'Tilman Friedrich's industry forum' we present...
- Monthly review of portfolio performance – 31 December 2024
- Will a meeting between President Putin and Trump provide direction for investment in 2025?
- What tax-free investments can you make in Namibia?
- The FIM Act – a new start
- Our safety net for our clientss
In Compliments, read...
- A compliment from a pensioner
In ‘Benchmark: a note from Günter Pfeifer’, read about…
- Important circulars and notices issued by the fund
In 'News from RFS', read about...
- The Retirement Compass
- Annemarie Nel scoops another insurer’s award
- RFS encourages complaints and fraud reporting
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In 'Legal snippets', read about...
- The all-new Marriage Act
- The Electronic Transactions Act is moving forward
- SA PFA orders death benefit payment despite time barring of complaint
n 'Snippets for the pension funds industry,' read about...
- Current challenges in the group benefits space
- Working longer vs retiring now: what’s best for your retirement
In ‘Snippets of general interest', read about...
- The importance of holistic retirement planning
- Safeguard your financial journey with an emergency fund
And make a point of reading what our clients say about us in the ‘Compliments’ section. It should give you a good appreciation of who and what we are!
As always, your comment is welcome, so open a new mail and drop us a note!
Regards
Tilman Friedrich |
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| A NOTE FROM THE MANAGING DIRECTOR |
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| New Year message to RFS stakeholders |
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Dear RFS stakeholders,
We have turned our back on 2024 and are into 2025, boots and all!
I hope you all had a relaxing festive season and found ample opportunity to regenerate and recharge your energy to head into the winds 2025 may blow at you!
I look forward to seeing and interacting with you in the year ahead. At RFS, we stand ready to serve you and live up to our credo of providing rock-solid fund administration that lets you sleep in peace!
I wish you a prosperous 2025 with lots of fun, excitement, health, and happiness! |
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| TILMAN FRIEDRICH'S INDUSTRY FORUM |
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Monthly Review of Portfolio Performance
to 31 December 2024 |
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In December 2024, the average prudential balanced portfolio returned 0.4% (November 2024: 1.8%). The top performer is Ninety-One Namibia Managed Fund, with 0.8%, while Allan Gray Namibia Balanced Fund, with -0.2%, takes the bottom spot. NAM Coronation Balanced Plus Fund took the top spot for the three months, outperforming the ‘average’ by roughly 1.8%. Allan Gray Namibia Balanced Fund underperformed the ‘average’ by 1.1% on the other end of the scale. These returns are before (gross of) asset management fees.
The Monthly Review of Portfolio Performance to 31 December 2024 reviews portfolio performances and provides insightful analyses. Download it here... |
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| Will a meeting between President Putin and Trump provide direction for investment in 2025? |
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The political and economic environment has not changed since I expressed my views in this column last month, and I stand by those views. I concluded that the world faces many uncertainties that could severely impact economies and the financial market. During 2024, my main theme was that the world might drift into World War III. President Donald Trump’s election statements on the US waging never-ending costly wars and ending the Ukraine war within 24 hours dimmed the prospect of a major military confrontation somewhat. However, following his inauguration, his most recent rhetoric leaves doubt about his electioneering statements, and he has not yet ended the Ukraine war. A meeting between President Putin and President Trump may provide more direction.
Read paragraph 6 of the Monthly Review of Portfolio Performance to 31 December 2024 for our views on investment markets and global political developments. It also reviews portfolio performances and provides insightful analyses. Download it here... |
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| What tax-free investments can you make in Namibia? |
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A reader recently posed the following questions;
I read the article "How can I minimise tax on my retirement income?" in Moneyweb and have the following questions:
- Are there tax-free savings accounts (TFSA) in Namibia that allow tax-free growth and withdrawals? If yes, what amount are the contributions limited to?
- If I retire (for example, as a living annuitant within the Benchmark Member Choice Living Annuity Fund), could I instruct the fund administrator to deduct additional contributions at source from my monthly salary and reinvest such contributions back into my Benchmark Member Choice Living Annuity Fund credit, to reduce taxable income since contributions are tax-deductible up to N$150,000 per annum?
Our response:
- Tax-free investments
Namibia has nothing equivalent to the SA TFSAs (tax-free savings accounts). The most tax-effective savings vehicles in Namibia are registered retirement funds. Compulsory contributions to these funds are tax deductible by the employee up to N$ 150,000 annually. By the employer structuring its remuneration to carry the total contribution to its retirement fund, the tax-free contribution to retirement funds can be increased further. The income derived by retirement funds is income tax exempt, while services provided to the fund are substantially VAT-exempt. Once a retirement fund pays a benefit, the benefit is either tax-free, partially tax-free or taxed at a beneficial rate. The tax status of retirement funds is referred to as EET, meaning fund contributions and income are tax-exempt, while benefits are partially taxable.
Interest on Post Office savings accounts are also tax-exempt for natural persons and carry an explicit government guarantee. However, Nampost income is taxable, and income tax and VAT would reduce the interest rate it can afford to pay.
Interest on government bonds and treasury bills is also tax-exempt for natural persons. Dividends are also tax-free, but they are likely to be taxed soon. I am unaware of any other investments in Namibia that offer tax advantages.
- Contributions to the living annuity account
As pointed out in 1, only compulsory contributions to an approved retirement fund and discretionary contributions to a retirement annuity fund are tax-deductible up to N$150,000. Compulsory contributions refer to those made under an employer-employee relationship. Deductions from the annuity paid by the living annuity do not arise out of such a relationship, do not meet the requirement, and are, therefore, not tax deductible.
Suppose the deduction is made from the annuity for contributing to a retirement fund. In that case, it is potentially deductible if the taxpayer carried on any trade (includes every profession, trade, business, employment, calling, occupation or venture, including the letting of any property – i.e. actively generated income) during the relevant year of assessment. The annuity paid by the living annuity or any investment income is not a ‘trade’, and a retirement annuity contribution would not be deductible from such income.
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The FIM Act – a new start
Contributed by Carmen Diehl, C.A.(Namibia), Senior Manager: Risk Management and Compliance |
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The FIMA (Act 2 of 2021) was promulgated in Government Gazette no. 7645 on 1 October 2021. The Minister of Finance has not yet set a date for it to become effective. It hibernated ever since, but following last year’s elections, we will see action on it again in 2025, once the new Minister of Finance has been appointed and found his feet. NAMFISA, however, has not been idle, spending a lot of time revising and issuing FIMA standards and regulations. In the next few issues of this newsletter, we will present the latest status on the standards and regulations and provide a brief overview.
Introduction
Since 2015, NAMFISA has issued draft standards and regulations under the FIM Bill and the FIM Act to the Industry for comment. Because of industry comments or other developments, various standards and regulations have been updated, reissued, withdrawn, or included in other standards or regulations.
Below is a list of all draft standards and regulations under the FIM Act that apply to retirement funds. A summary of their main provisions will be presented over the next few newsletter issues.
The FIM Act includes retirement funds in the definition of ‘financial institutions’, so all standards and regulations applicable to financial institutions also apply to retirement funds (unless they are explicitly excluded).
NAMFISA issues standards, while the Minister of Finance issues regulations.
List of draft standards and regulations under the FIM Act
The draft standards and regulations under the FIM Act applicable to retirement funds and approved by the NAMFISA Board by the end of 2022 are as follows:
Standards Chapter 5: Retirement Funds
- RF.S.5.1 Definition of ‘actuarial surplus’
- RF.S.5.2 Requirements for an investigation by and the report of a valuator
- RF.S.5.3 Minimum information that must be furnished to a fund by an employer with respect to the payment of contributions
- RF.S.5.4 Requirements for rules of a fund and any amendment of such rules
- RF.S.5.5 The determination of the soundness of the financial position of a fund
- RF.S.5.6 Requirements for the voluntary termination or dissolution of a fund
- RF.S.5.7 Minimum benefits that a fund must provide to its members
- RF.S.5.9 Compulsory beneficiary nomination forms
- RF.S.5.10 The conditions on which a defined contribution fund may be exempted from the requirement of regular investigations by a valuator
- RF.S.5.13 Requirements of a communications strategy
- RF.S.5.15 Requirements for the annual report of a fund
- RF.S.5.17 Categories of persons having an interest in the compliance of a fund with payment of contributions and the reports that must be submitted to such persons
- RF.S.5.18 Matters to be included in an investment policy statement
- RF.S.5.19 Matters to be communicated to members and contributing employers and minimum standards for such communication
- RF.S.5.20 Matters to be included in a code of conduct
- RF.S.5.22 The transfer of any business from a fund to another fund or the transfer of any business from any other person to a fund
- RF.S.5.23 The fee that may be charged to members for copies of certain documents, and the reports and other information that must be provided by the board of a fund to its members free of charge
- RF.S.5.24 Manner and form of application for registration of a fund
- RF.S.5.25 Form of certificate of registration for a fund
- RF.S.5.26 Governance of retirement funds
- RF.S.5.27 Manner and form of application, by a registered fund, for cancellation of registration, or variation of the conditions subject to which registration was granted
Regulations Chapter 5: Retirement funds
- RF.R.5.1 Funds and classes of funds for inclusion in the definition of “fund”
- RF.R.5.3 The terms and conditions on which the board of a fund may distribute some or all of an actuarial surplus
- RF.R.5.5 Loans which may be granted to a member and guarantees which may be furnished to a person in respect of a loan granted or to be granted by such person to a member
- RF.R.5.7 The rate of interest payable on contributions not transmitted or received, and on the value of a benefit or right to a benefit not transferred, before the expiration of the applicable period
- RF.R.5.8 The protection of unpaid contributions of an employer
- RF.R.5.11 Exemption from prohibited investments
Standards Chapter 10: General
- GEN.S.10.8 Independence
- GEN.S.10.9 Code of conduct
- GEN.S.10.11 Institutional investment
- GEN.S.10.12 Content of the investment mandate
- GEN.S.10.13 Payment of contributions
- GEN.S.10.17 Description of plain language
- GEN.S.10.18 Fiduciary responsibilities of financial institutions and intermediaries and functionaries
- GEN.S.10.19 The form and content of any application for approval of a change of name, use of another name or use of a shortened form or derivative form of a name
- GEN.S.10.20 Definition of related party transactions and identifying those that are prohibited
- GEN.S.10.23 Fees and charges
The missing numbers in the sequences above indicate that NAMFISA must still issue a standard.
The following draft standards under the FIM Act applicable to retirement funds were issued by NAMFISA to the Industry for comment (it is not certain whether the NAMFISA Board has approved these standards in the meantime):
Standards Chapter 10: General
- GEN.S.10.2 Fit and proper requirements
- GEN.S.10.10 Outsourcing
- GEN.S.10.21 Treating customers fairly
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| Our safety net for our clients |
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RFS confirms that it holds the following covers through our brokers until 30 June 2025. Details were forwarded to all clients under separate cover.
- Fidelity cover of N$ 9,5 million, excess of N$ 250,000.
- Professional Indemnity cover of N$ 95 million, excess of N$ 250,000.
- Directors' personal liability cover of N$ 5 million per director, no excess.
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| COMPLIMENT |
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Compliment from a pensioner
Dated 1 November 2024
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“Dear Bianca
Thank you for your instant response. Amazing. This proves once more that RFS is one of the very few service providers who stand out by more than a mile in delivering outstanding service and response times !!
Much appreciated in this day and age of constant admin obstacles with banks, large insurers and others.
Kind regards
Jens C Kuehhirt
t/a JCK Consulting”
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Read more comments from our clients, here...
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| BENCHMARK: A NOTE FROM GÜNTER PFEIFER |
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| Important circulars issued by the Fund |
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The Benchmark Retirement Fund issued the following new circular:
- 202501 – Change in fund levy
Clients are welcome to contact us if they require a copy of any circular. |
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| NEWS FROM RFS |
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| The RETIREMENT COMPASS |
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RFS Fund Administrators sponsors this newsletter as part of our social responsibility and initiatives to support the retirement fund industry. It aims to provide members of funds managed by RFS Fund Administrators and other parties in their network with retirement funding and planning-related news and insights, presented understandably.
Read the latest Retirement Compass (vol 1, no 4) here... |
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| Annemarie Nel scoops another insurer’s award. |
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We congratulate Annemarie on scooping another Ruby Award for the amount of business placed with Sanlam. It is one thing to do what you love—in her case, keeping clients happy and providing peace of mind with professional advice and great client service—but it is quite another when you get recognition for it!
Well done, Annemarie. Keep it up! This inspires the rest of the RFSFA colleagues and the RFS team!
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| RFS encourages complaints and fraud reporting |
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NAMFISA assists the public in resolving complaints regarding non-banking financial institutions such as RFS, the Benchmark Retirement Fund or RFS Financial Advisers. However, it expects any complainant to have first unsuccessfully approached the relevant financial institutions regarding the complaint before it would assist.
The RFS website was expanded recently to allow the public to lodge complaints.
The RFS website also allows the public to confidentially alert an independent professional adviser about any suspected or committed fraud a person may become aware of regarding RFS, the Benchmark Retirement Fund or RFS Financial Advisers. The adviser will inform RFS management of the report without disclosing the reporting person's identity.
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| Important circulars issued by RFS |
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RFS issued no new circular after RFS 2024.10-07:
- Confirmation of professional indemnity and fidelity insurance cover.
Clients are welcome to contact us if they require a copy of any circular. |
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| LEGAL SNIPPETS |
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| The all-new Marriage Act |
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The all-new Marriage Act 14 of 2024 was promulgated in the Government Gazette at 8548 pm on 30 December 2024.
It will replace the Marriage Act 25 of 1961 and all its amendments. It repeals sections 23, 24 and 25 of the Married Persons Equality Act 1 of 1996 and amends sections (10) and 226 of the Child Care and Protection Act 3 of 2015. The Minister must still determine when it will come into operation.
The Act’s purpose is to regulate the solemnisation of marriages, to provide for the validation and recognition of certain marriages, and to provide for incidental matters.
The following is a summary of the Namibian Marriage Act for young people contemplating marriage.
- Key definitions
- The Act recognises a customary marriage and a marriage.
- Customary marriage is a marriage concluded or recognised in terms of any customary law of Namibia or concluded or recognised in terms of the customary law of a country other than Namibia but excludes a marriage or marital union between persons of the same sex wherever concluded or a marriage or marital union concluded in a country other than Namibia which is not capable of being validly concluded in Namibia
- Marriage is a legal union entered into voluntarily between two persons of the opposite sex and of full age, solemnised or validated in terms of this Act or the repealed law or recognised in terms of the Recognition of Certain Marriages Act, 1991 (Act No. 18 of 1991)
- Important Basics
- Marriage is a Legal Union: It's not just a ceremony; it has serious legal consequences.
- Age Matters: You must be at least 18 years old to marry. If you're between 18 and 21, you usually need written consent from your parents or legal guardian.
- Who Can Marry: You can't marry close relatives (parents, siblings, grandparents, etc.). There are specific rules about who you can and cannot marry.
- Different Types of Marriage: The law recognises different types of marriage, including customary marriages and marriages performed in other countries.
- Before You Say "I Do"
- Important Steps:
- Give Notice: You and your partner must give the government at least 90 days' notice of your intention to marry.
- Public Notice: Your intention to marry will usually be publicly announced.
- Obtain a Pre-Marriage Confirmation: This document confirms no legal obstacles to your marriage.
- Possible Objections: Anyone can object to your marriage if they believe there's a legal reason why you shouldn't get married.
- Consent is Key: You must freely and willingly agree to the marriage. If you feel pressured or forced, it's not a healthy start.
- The Wedding Day
- Marriage Officer: The ceremony must be performed by a legally recognised marriage officer (like a magistrate or religious leader).
- Witnesses: You need at least two witnesses at the ceremony.
- Marriage Certificate: After the ceremony, you'll receive a marriage certificate as proof of your marriage.
Key Things to Remember
- Marriage is a Big Decision: It is a legal and personal commitment. Take your time, talk to your partner, and understand the legal and personal implications.
- Know Your Rights: Familiarize yourself with the laws around marriage to make informed decisions.
- If in Doubt, Seek Advice: If you have any questions or concerns, talk to a trusted adult, a lawyer, or a marriage counsellor.
Prohibitions
Here's a summary of the prohibitions and their consequences within the Namibian Marriage Act:
Part 2: Pre-Marriage Procedures
- Failure to Forward Objections (Section 15(2)): Anyone (other than the Registrar-General) receiving an objection to a marriage must forward it to the Registrar-General.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Solemnisation after Pre-Marriage Confirmation Expiry (Section 19(3)): A marriage officer may not solemnise a marriage after the pre-marriage confirmation has expired.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
Part 3: Solemnisation of Marriage
- Solemnisation without Required Documents/Checks (Section 21(2)): A marriage officer may not solemnise a marriage if:
- The information in the identification documents doesn't match the pre-marriage confirmation.
- One or both parties don't meet the minimum age requirements without the necessary consent.
- Incorrect Matrimonial Property Regime (Section 21(3)): A marriage officer must ensure the pre-marriage confirmation reflects the correct matrimonial property regime. If it doesn't, they must advise the couple to have it amended before the marriage.
- Consequence (for all subsections of Section 21): A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Solemnisation by Unauthorized Marriage Officer (Section 22(1)): A marriage officer whose name isn't on the pre-marriage confirmation may not solemnize the marriage without approval from the registrar.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Solemnisation without Required Presence/Compliance (Section 23(1)): A marriage officer may solemnise a marriage only if:
- Both parties and at least two witnesses are present.
- The parties have complied with the Act's requirements.
- Marriage by Proxy (Section 23(2)): A valid marriage cannot be concluded through a representative (proxy).
- Solemnisation Outside Permitted Hours/Locations (Sections 23(3), 23(5), 23(6)): Magistrates and Ministry staff may solemnise marriages only within ordinary working hours/at their designated locations unless specific authorisation is granted.
- Failure to Follow Prescribed Formula (Section 23(7)): Marriage officers must follow the prescribed formula when solemnising a marriage.
- Consequence (for all subsections of Section 23): A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Solemnisation Despite Known Legal Impediment (Section 24(1)): A marriage officer may not solemnise a marriage if they know of a legal impediment, even if a pre-marriage confirmation has been issued.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Solemnisation Without Personal Consent (Section 25(1)): A marriage officer may not solemnise a marriage if they have reason to believe either party:
- Has not consented of their own free will.
- Is unable to consent due to mental illness, incapacity, disability, impairment, etc.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Failure to Complete/Issue Marriage Certificate/Record (Section 27(1)): Immediately after the ceremony, the marriage officer must complete and sign the marriage record and certificate, ensure they are signed by the parties and witnesses, and issue the original certificate to the spouses.
- Failure to Transmit Marriage Information (Section 27(3)): The marriage officer must transmit prescribed marriage information to the Registrar-General within the prescribed time and manner.
- Consequence (for both subsections of Section 27): A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Failure to Report Non-Solemnisation (Section 28(1)(b)): If a marriage doesn't take place after a pre-marriage confirmation is issued, the marriage officer must endorse the confirmation with the reason and return it to the registrar.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
Part 6: Offences and Penalties
- Unauthorized Payments/Gifts (Section 30): Any official (marriage officer, registrar, etc.) may not demand or receive any unauthorised fee, payment, or reward.
- Consequence: A fine not exceeding N$20,000, imprisonment not exceeding four years, or both.
- Bigamous Marriages (Section 31): A person may not enter into a marriage while still married to someone else, nor may someone go through a marriage ceremony with someone they know is already married.
- Consequence: A fine not exceeding N$20,000, imprisonment not exceeding four years, or both.
- False Declarations (Section 32): A person may not knowingly make false representations or statements for the purposes of the Act.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- False Pretenses Regarding Consent (Section 33): A person may not try to prevent a marriage by providing false information about legal impediments or consent requirements.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
- Unauthorized Solemnisation (Section 34(1)): A marriage officer may not solemnise a marriage if they are not authorised to solemnise or know that the Act prohibits it.
- Consequence: A fine not exceeding N$20,000, imprisonment not exceeding four years, or both.
- Impersonation (Section 35): A person may not impersonate someone else in a marriage or marry under a false name/description with intent to deceive.
- Consequence: A fine not exceeding N$20,000, imprisonment not exceeding four years, or both.
- False Representation of a Marriage Ceremony (Section 36): A person may not go through a ceremony they represent as a marriage knowing it is void.
- Consequence: A fine not exceeding N$10,000, imprisonment not exceeding two years, or both.
This list covers the explicit prohibitions and their corresponding penalties outlined in the Namibian Marriage Act. It's important to note that this is not legal advice; consulting with a legal professional is always recommended for specific situations |
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| The Electronic Transactions Act is moving forward. |
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The Electronic Transactions Act (Act 4 of 2019) was promulgated in Government Gazette no. 7068 on 29 November 2019. The Act, except for Section 20 (electronic signature) and Chapters 4 (Consumer Protection) and 5 (Accreditation of Security Services or Products), came into operation on 29 November 2019.
The general purpose of the Act is to
- Provide a general framework for the use and recognition of electronic transactions.
- Give legal effect to electronic transactions and data messages.
- Provide consumer protection, specifically when dealing with suppliers offering goods or services for sale, for hire, or for exchange in an electronic transaction.
- Provide for the admission of electronic evidence in court.
- Establish the Electronic Info Systems Management Advisory Council to advise the Minister.
The following two Government Gazettes relating to the Electronic Transactions Act were issued on 20 December 2024:
- #8540 – Gen N836: Communications Regulatory Authority of Namibia (CRAN): Notice of Intention to make Regulations regarding Accreditation of Security Services or Products and Providers of Such Services and Products (Regulations under section 47 of the Electronic Transactions Act)
- #8541 – Gen N837: Communications Regulatory Authority of Namibia: Notice of Intention to make Electronic Signature Regulations (Regulations under section 20 of the Electronic Transactions Act)
The Government Gazettes invite product or service providers and the public to submit comments on the proposed regulations in writing to CRAN on or before 30 January 2025. |
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| SA PFA orders death benefit payment despite time barring of complaint |
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The Pension Funds Adjudicator has ordered the Mineworkers Provident Fund to investigate and pay a death benefit. However, the 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. 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 for her complaint to be investigated. The respondent said that upon receipt of the complaint, a detailed investigation was carried out, and certain documents were outstanding, delaying the process of finalising the claim. The respondent also submitted that confirmation was required on 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 there is no 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 section 37C of the Act. She added that more than 14 years had passed without the respondent's completion of 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. |
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| SNIPPETS FOR THE PENSION FUND INDUSTRY |
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| Current challenges in the group benefits space |
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This interview with Sheldon Friedericksen, General Manager of Group Benefits at FedGroup, explores the challenges and opportunities in group benefits. It highlights the need for modernised benefit packages, the impact of the post-COVID cost-of-living crisis, and the importance of engaging and educating employees about financial planning.
Key Points:
Challenges in Group Benefits
- Outdated benefits fail to meet modern workforce needs.
- The rising cost of living threatens retirement planning.
- Young employees often struggle to prioritise saving for retirement.
Enhancing Retirement Preparedness
- Build trust between employers and employees.
- Simplify complex financial products to improve understanding.
- Promote financial literacy and encourage consistent savings habits.
Role of Technology and Innovation
- Use AI and digital tools for personalised financial advice.
- Provide easy access to financial information via innovative technologies.
- Support independent financial advisors to offer tailored, unbiased advice.
Adapting to Global Mobility
- Address the needs of a global, mobile workforce.
- Design group benefits relevant across sectors and geographies.
- FedGroup’s Commitment and Future Directions
Drive innovation and create solutions tailored to today’s challenges.
- Simplify fees and remove unnecessary complexity in financial products.
- Adapt to regulatory changes, such as the two-pot retirement system.
- Balance short-term and long-term financial goals for individuals.
Conclusion
The interview underscores the need for transparent, innovative, and practical group benefits that adapt to changing workforce dynamics. By simplifying products and leveraging technology, companies like FedGroup aim to provide financial security and better retirement outcomes, ensuring relevance and value for diverse, global workforces.
Read the full article in Cover of 2 July 2024, here… |
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| Working longer vs retiring now: What’s best for your retirement |
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This article explores critical considerations for deciding whether to retire now or work longer, emphasising the importance of sustainable retirement planning tailored to individual circumstances. Key points include:
- Impact of Working Longer:
- Continuing to work allows for additional savings and reduces the duration of reliance on retirement funds.
- An extra year of work contributes directly to retirement savings and provides existing investments more time to grow.
- Managing Expenses:
- Reducing pre-retirement expenses leads to dual benefits: increased savings and lower required retirement capital.
- Lower drawdowns on retirement savings preserve capital, reduce tax liabilities, and enhance financial sustainability.
- Investment Fees:
- High fees significantly impact retirement savings. Lower fees allow earlier retirement or provide the same income from a smaller savings pool.
- Reducing fees enables higher compounding growth over time.
- Blended Income Sources:
- Diversifying income through options like rental properties or part-time consulting can reduce reliance on retirement savings.
- Supplementary income streams help fill financial gaps without depleting capital.
- Lifestyle Adjustments:
- Downsizing housing, reducing transport costs, and altering entertainment habits can lower expenses without sacrificing quality of life.
- Adjusting spending patterns can enhance financial resilience in retirement.
- Holistic Retirement Planning:
- Effective retirement planning involves balancing savings, expenses, additional income, and personal circumstances.
- Practical steps include calculating essential expenses, identifying cost-cutting opportunities, and exploring supplemental income.
The article underscores that retirement is not an all-or-nothing decision and encourages a personalised approach to secure long-term financial stability.
Read the full article by 10X Investments in Moneyweb of 9 December 2024, here… |
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| SNIPPETS OF GENERAL INTEREST |
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| The importance of holistic retirement planning (continued) |
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Mastering time when investing for a secure future
Timing in retirement planning and starting to save early is critical for building a secure financial future. By beginning early, investors allow more time for compounding to grow their savings significantly. The author outlines three key dates—when saving starts, the retirement date, and life expectancy—that influence the sustainability of retirement funds.
- Timing is Crucial: Starting your retirement savings early significantly enhances your financial security, allowing more time for investments to grow through compounding. Delaying can drastically increase the percentage of income needed to save.
- Control What You Can: Focus on factors like how much you save and the risks you take. While external factors like inflation and market changes are uncontrollable, adjusting your contributions and timeline can improve outcomes.
- Key Dates Matter: The starting point for saving, your planned retirement age, and your life expectancy are critical in determining how long your savings need to last.
- Long-Term Perspective: Avoid emotional reactions to short-term market fluctuations. Staying invested ensures you benefit from recovery periods and compounding returns, as timing the market often leads to missed opportunities.
- Power of Consistency: Even small contributions made early can grow substantially, whereas starting late requires significantly higher savings, which may not be practical.
- Protect Your Savings: Withdrawing from retirement funds interrupts compounding and can delay achieving your goals.
Conclusion:
Start saving early, stay consistent, and focus on the factors you can control to build a strong, resilient retirement plan.
Why your risk profile matters
This article highlights the role of risk in retirement planning, explaining how understanding and managing your risk profile ensures your investments align with your goals and comfort level. Taking the right amount of risk at different life stages is key to growing and preserving wealth for retirement. The article also warns against overly cautious investing, which can result in inflation eroding savings, and the dangers of scams like Ponzi schemes.
Key Messages
- The Importance of Risk:
- Higher risk can lead to higher returns, especially when young, allowing for long-term growth through investments like shares.
- As retirement approaches, reducing risk protects accumulated savings by shifting to more stable investments like bonds and income-producing assets.
- Understanding Risk Profiles:
- Risk profiles range from conservative (low risk, limited growth) to aggressive (high risk, higher potential returns).
- Your risk profile should match your comfort level, goals, and stage in life.
- Balancing Risk and Goals:
- Aligning your investments with your risk profile prepares you for market changes and avoids emotional reactions.
- Sometimes, taking more risks than comfort may be necessary to meet financial goals.
- Lessons from Real-Life Examples:
- Avoid being overly cautious, as inflation can erode low-risk investments over time.
- Stay vigilant against fraudulent schemes like Ponzi schemes, which promise high returns with little risk but often collapse.
- The Role of Financial Advisors:
- Advisors help tailor strategies to your risk profile, balancing returns and risks effectively.
- They provide objective advice to counter emotional decisions during market fluctuations.
- Key Takeaway:
- Younger investors should embrace more risk to grow savings, while those nearing retirement should adopt a conservative strategy to protect assets. Balanced risk and consistent savings combat inflation and ensure long-term financial security.
Source: Moneyweb, article series by Jaco Fouché, Jenwil Blue Star. |
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| Safeguard your financial journey with an emergency fund |
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This article emphasises the importance of an emergency fund in safeguarding your financial journey, much like a cheetah relies on its tail for balance and agility. An emergency fund ensures stability, enabling you to handle unexpected expenses—such as medical bills, car repairs, or job loss—without resorting to high-interest debt or compromising long-term savings.
Key Takeaways:
- Why an Emergency Fund Matters:
- It provides financial resilience during crises, preventing minor setbacks from becoming major challenges.
- It lets you stay on track with long-term goals like retirement or buying a home.
- How to Build an Emergency Fund:
- Prioritize saving after meeting debt and retirement obligations.
- Aim for 3–12 months of living expenses as a buffer.
- Avoid using long-term retirement savings, such as the two-pot retirement system, for emergencies, as it can compromise your future security.
- Where to Save Your Emergency Fund:
- Savings Account: Simple and accessible, with some interest benefits.
- Money Market Account: Offers higher interest rates but may have access restrictions.
- Bond Facility: Overpaying on your home loan creates a fund that reduces loan interest until needed.
Conclusion:
An emergency fund is essential for financial stability and progress. By preparing for the unexpected, you protect your retirement savings and ensure your financial aspirations remain on course, no matter what challenges arise.
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| AND FINALLY... |
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| Wise words from wise men |
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"We cannot choose our external circumstances, but we can always choose how we respond to them." ~ Epictetus (55 – 135A.D.), Greek philosopher.
This underscores the power of attitude over the situations we find ourselves in. |
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Disclaimer
Whilst we have taken all reasonable measures to ensure that the results reflected herein are correct, Benchmark Retirement Fund and RFS Fund Administrators (Pty) Ltd do not accept any liability for the accuracy of the information and no decision should be taken on the basis of the information contained herein before confirming the detail with the relevant portfolio manager. |
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