2025-06



Issued June 2025

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In this newsletter...
	Benchtest 05.2025 – Has Regulation 13(5) delivered? The FIMA restarted; Retirement v resignation and more...

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	Important notes & reminders In this newsletter... Tilman Friedrich's industry forum Compliment Benchmark: a note from Günter Pfeifer	News from RFS News from NAMFISA Legal snippets Snippets for the pension fund industry Snippets of general interest And finally...


IMPORTANT NOTES AND REMINDERS

	NAMFISA levies Funds with June 2024 year-ends must submit their 2nd levy returns and payments by 25 July 2025; Funds with December 2024 year-ends must submit their 1st levy returns and payments by 25 July 2025; and Funds with July 2024 year-ends must submit their final levy returns and payments by 31 July 2025. Repo rate unchanged in June The repo rate remained unchanged at 6.75% during June. The interest rate of 10.75% on funds’ direct loans and repayments will remain unchanged for July 2025. 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...	Retirement calculator Use our web-based retirement and risk shortfall calculator for your 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 the governance and management of private funds, registered as of June 2024, here...


IN THIS NEWSLETTER...

	In this newsletter, we address the following topics:

	In 'Tilman Friedrich's industry forum' we present... Monthly review of portfolio performance – 31 May 2025 From Promise to Performance: What Has Regulation 13(5) Delivered in 10 Years? The FIM Act – a new start: RF.S. 20, RF.S. 22, and RF.S. 23 Retirement v Resignation: A Matter of Interpretation In Compliments, read... A compliment from Hugh Bruce In Benchmark: a note from Günter Pfeifer, read ... Welcoming new Benchmark Participating Employers Why Pension Provision Should Be on Every Business Agenda In 'News from RFS', read about... Veueza Kangueehi Promoted RFS Encourages Complaints and Fraud Reporting Elevate Your Fund Experience with EPIC The Retirement Compass	News from NAMFISA NAMFISA Publishes Proposed Standards under the FIMA Enhancing Trustees’ Fiduciary Duties In 'Legal snippets', read about... Adjudicator Determination concerning the death benefit allocation in Bester v CRAF In 'Snippets for the pension funds industry,' read about... The Five Worst Investment Decisions for Your Retirement Do I Still Need My Life Cover in Retirement? In ‘Snippets of general interest', read about... Choosing Your Trustees is a Defining Decision How to Ensure a Smooth Estate Administration 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


TILMAN FRIEDRICH'S INDUSTRY FORUM

Monthly Review of Portfolio Performance to 30 May 2025

	In May 2025, the average prudential balanced portfolio returned 2.5% (April 2025: 1.9%). The top performer is the NAM Coronation Balanced Plus Fund, with 4.7%, while the Lebela Balanced Fund, with 1.5%, takes the bottom spot. Allan Gray Balanced Fund took the top spot for the three months, outperforming the ‘average’ by roughly 2.6%. The Investment Solutions Namibia Balanced Growth Fund underperformed the ‘average’ by 2.1% on the other end of the scale. Note that these returns are before (gross of) asset management fees. The Monthly Review of Portfolio Performance to 31 May 2025 reviews portfolio performances and provides insightful portfolio analyses. Download it here...

From Promise to Performance: What Has Regulation 13(5) Delivered in 10 Years? Contributed by Vincent Shimutwikeni, B. Juris, LLB (honours), CGRC-BP™, Manager: Legal Support

	Ten years later, it is essential to ask whether Regulation 13(5) should be recalibrated. While the developmental intent remains noble, the implementation has exposed systemic weaknesses that must be addressed. Perhaps the policy should evolve towards a performance-based compliance framework where investment in unlisted assets is encouraged through incentives rather than mandates, and where governance, transparency, and investor protection are significantly strengthened. Ultimately, the conversation must return to first principles: fiduciary duty, accountability, and long-term sustainability. The future of unlisted investments in Namibia will depend not just on regulation but on building an ecosystem that genuinely supports growth, innovation, and, most importantly, the people's retirement dreams. Read paragraph 6 of the Monthly Review of Portfolio Performance to 31 May 2025 for our views on investment markets and global political developments. It also reviews portfolio performances and provides insightful analyses. Download it here...


The FIM Act – a new start Contributed by Carmen Diehl, C.A.(Namibia), Senior Manager: Risk Management and Compliance

	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. Although it has been inactive since its promulgation, following last year’s elections, we can expect action on it again in 2025, once the new Minister of Finance has settled into her role. 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. This summarises the main provisions of draft standards and regulations under the FIM Act and implications for retirement funds. Standards Chapter 5: Retirement Funds RF.S.5.20 Matters to be included in a code of conduct The statement does not disclose to whom it applies. Summary: The standard outlines the essential elements that must be stipulated in the code of conduct for the board of a retirement fund and must be included in the rules of the fund: Duty of Attendance of meetings: The code of conduct must include the minimum attendance requirement. Duty of Active Engagement: Board members must actively engage in board activities, not be merely passive vote-casters at meetings. Duty of Prudence: Board members must discharge their responsibilities with skill, diligence and prudence and ensure that the fund is not unduly exposed to risk of loss. Duty to Protect the Fund: The fund must be operated subject to taking appropriate measures to identify and control risk. Duty of Avoidance and Fair Dealing: Board members should avoid conflicts of interest, and if unavoidable, adequately manage such conflicts. Duty of Independence: Board members must exercise independent thought and analysis when considering the board's business. Duty of Efficiency: Board members must incur only necessary expenses, ensure that meeting expenses are reasonable and ensure that the bases for the expense charges of service providers are reasonable. Duty to Monitor Performance: Board members must monitor the investment and administrative performance of the fund. Duty to Hold Service Providers Accountable: Board members must monitor the performance of and hold service providers accountable to maintain high professional standards. Duty of Compliance: Board members must ensure compliance with all applicable legislation, regulations, and standards. This standard must be read in conjunction with Standard No. GEN.S. 10.9 – Code of Conduct. What to do: Trustees should set up a code of conduct or amend the existing code of conduct to include the requirements of this standard. Trustees must arrange for the code of conduct to be included in the rules through a rule amendment. Trustees need to consider whether their funds and the available resources are sufficient to meet the prescriptions of this standard. Budgetary provisions will have to be made for the expenditure the fund will incur to meet the new requirements set by the various standards and regulations, and a portion of the employer's contribution will be diverted for this purpose. RF.S. 5.22 Transfer of any business from a fund to another fund or from any other person to a fund The statement does not disclose to whom it applies. Summary: The standard specifies the requirements and procedures for transferring business from one retirement fund to another. Prohibited Transfers: Transfers are prohibited if either fund is non-compliant with the Act, involved in legal action, technically insolvent, or not authorised by its rules to transfer or accept transfers. Approval Requirements: NAMFISA must approve the transfer, ensuring it is in the interest of members of both funds. The transfer agreement must address members' concerns, comply with the Act, and protect accrued benefits. Transfer Agreement: Must include provisions for protecting members' benefits, equitable treatment of members, recognition of service periods, and a detailed analysis of the transfer's impact. Independent advisor or valuator reports, if applicable, must be appended to the transfer agreement upon submission to NAMFISA What to do: Fund rules should provide for making and receiving transfers and amalgamating with other funds in compliance with this standard. Umbrella funds should draw up a transfer agreement template per this standard. RF.S.5.23 Fees that may be charged for copies of certain documents The statement does not disclose to whom it applies. Summary: Free Copies: Members are entitled to receive copies of specific documents free of charge, including the fund's rules, governance documents, annual reports, certificates of registration, notices required by the Act, applications for material changes, and any amendments to these documents. Reasonable Fees: Funds may charge reasonable fees for copies of documents not required to be provided by the Act or specifically requested by a member. These documents include previously provided documents, recent reports from auditors and service providers, other board reports, meeting minutes, and legal opinions involving the fund. Format of Copies: Members can request documents in either paper or electronic format. Electronic copies are provided free of charge, while paper copies may incur a reasonable fee. If a document is difficult to copy, the fund may offer an excerpt of the document free of charge. Board Approval of Fees: Fees for paper copies must be approved by the board on a cost-recovery basis. The board may delegate this approval to the principal officer, but must review these approvals regularly. Summary of Provisions: The board must prepare and distribute a summary of these provisions to each member free of charge. Related Standards: This standard should be read with Standard No. RF.S.5.13, outlining the requirements for a communications strategy to ensure adequate and appropriate information is communicated to members, employers, and sponsors. What to do: Funds should establish a list of documents that members are entitled to at no cost. Funds should establish a list of documents that members are entitled to at a fee and set the fee that must be reviewed annually. Service level agreements with service providers must be updated with the service providers’ involvement in providing documents.

Retirement v Resignation: A Matter of Interpretation Understanding the Legal Nuances Contributed by Vincent Shimutwikeni, B. Juris, LLB (honours), CGRC-BP™, Manager: Legal Support

	Introduction Interpreting retirement fund rules, especially terms like “may,” is a critical issue that impacts benefits administration. Misunderstandings, especially regarding retirement versus resignation, can lead to disputes. This article uses the Retirement Fund for Local Authorities and Utility Services in Namibia (RFLAUN) as a case study to explore the interpretative challenges. It focuses on how to approach the term “may” in fund rules and its implications for member entitlements. Most RFS-administered funds use the same wording in their rules. The Principal Issue: The Meaning of “May” in Fund Rules The key point of contention is using “may” in retirement fund rules. For instance, Rule 5.2.1 of RFLAUN allows that members aged 55 “may retire” but does not mandate it, meaning retirement is at the member's discretion. In contrast, Rule 7.1 provides a lump sum benefit upon resignation but does not apply to retirement, indicating a clear intent to preserve pension capital for long-term security upon retirement. The permissive “may” suggests flexibility but does not guarantee lump sum benefits when retiring. The rules distinguish between resignation (with immediate lump sum payouts) and retirement (focused on long-term financial security). Legal Framework and Principles of Interpretation Though not statutes, retirement fund rules carry quasi-legislative force and should be interpreted using principles that blend statutory and contractual interpretation. Courts apply a purposive, unitary approach, considering language, context, and the fund's objectives. The ruling in Total Namibia v OBM Engineering supports this, emphasising that interpretations should align with the fund’s core purpose and avoid outcomes that defy logic or business sense. Applying the Purposive Approach to Retirement Fund Rules A purposive interpretation emphasises preserving retirement capital to secure members’ financial well-being. Fund rules must prioritise long-term sustainability over the immediate, individual desire for lump sum payments. This aligns with the regulatory objective of ensuring members’ pension security, as outlined in the case study of RFLAUN. Retirement at 55 is discretionary but doesn’t trigger lump sum payments; instead, it activates different provisions that safeguard pension assets. Historical Context: The Origins of Pension Funds Pension systems originated as a safeguard for workers’ post-retirement security, especially in response to the vulnerabilities created by industrialisation. Their primary aim remains protecting financial stability for retirees, reinforcing the need to interpret fund rules in a way that secures long-term income rather than allowing for premature depletion of retirement funds. Conclusion and Recommendations The debate around the term “may” highlights the tension between individual choice and the collective need to preserve pension capital. Following a purposive approach, as endorsed by Namibia’s highest courts, ensures that retirement is discretionary but does not automatically entitle members to lump sum benefits. This approach supports retirement funds' primary goal: securing members' long-term financial well-being. Trustees and legal practitioners should adopt this approach to consistently and fairly administer fund rules. While interpretation can vary, prioritising sustainability over immediate access aligns with pension funds' historical and regulatory goals. This summary provides trustees with a clear understanding of the key issues regarding the interpretation of fund rules, particularly the meaning of “may,” and how to apply a purposive approach to ensure consistency and fairness in managing benefits. For the technically interested readers, follow this link to the full article.


COMPLIMENT

	Hugh Bruce, Lund Consulting Dated April 2025	“Thank you very much for the very amicable and professional relationship we could enjoy all the way from 2010/11 when we joined the Benchmark Fund, and for your always friendly and efficient assistance. I will miss the periodic contact we enjoyed and wish you all the best, may RFS continue to grow from strength to strength.”

	Read more comments from our clients, here...


BENCHMARK: A NOTE FROM GÜNTER PFEIFER

Welcoming Benchmark Participating Employers

	We are delighted to announce that the following employers have joined the Benchmark Retirement Fund, further solidifying the Fund’s commitment to providing top-tier retirement solutions. Savanna Beef GIZ Namibia Established in 2000, our fund has grown to serve nearly 20,000 members and manage assets worth N$10 billion (almost 5% of Namibia’s GDP!), a testament to the trust placed in us by employers, pensioners, and individuals who preserve their capital. As Namibia’s largest umbrella fund and the second largest fund after the GIPF, we take immense pride in being Namibia’s preferred choice for retirement benefits. The decision by these employers to join our fund underscores our reputation for excellence and our dedication to supporting the long-term financial security of both our employers and their employees. We warmly welcome the employees of our new employers to our Benchmark community. Your inclusion enriches our collective strength and diversity. We are committed to providing exceptional service, the best pension expertise, and industry-leading solutions to help you achieve your retirement fund goals. We thank each employer for choosing the Benchmark Retirement Fund and look forward to a prosperous and rewarding partnership.

Why Pension Provision Should be on Every Business Agenda Contributed by Vincent Shimutwikeni, B. Juris, LLB (honours), CGRC-BP™, Manager: Legal Support

	Why Pension Should Be on Every Business Agenda Pensions are often seen as the responsibility of governments or large companies, but business owners—big and small—also must plan for retirement. Despite their role in driving economic growth, entrepreneurs frequently overlook this crucial aspect of their financial security and that of their employees. Pensions aren't just for corporate workers—regardless of industry or role, everyone will eventually need a sustainable income in retirement. Entrepreneurs and Retirement: Why You Should Care Entrepreneurs often lack structured retirement plans, leaving them and their employees vulnerable. While focusing on business growth, owners neglect their retirement planning, which could have costly consequences. Offering pension benefits, however, strengthens employee loyalty, boosts morale, and fosters productivity, making it an important tool for retention and long-term business success. The Social Case for Pension Provision Providing pensions is more than a business decision—it contributes to national stability. In Namibia, many people face old-age poverty due to inadequate savings, which burdens public welfare systems. Businesses help alleviate this issue by promoting pension savings and contributing to the nation’s economic growth. Pension funds also create intergenerational equity, making the economy more sustainable and reducing reliance on foreign borrowing. Where Do You Start? Benchmark Retirement Fund provides tailored solutions for businesses of all sizes, ensuring simplicity, compliance, and long-term impact. The fund’s products make setting up pension plans straightforward, offering a range of options for small businesses (Benchmark Mini) and larger enterprises (Benchmark Employer Groups) with curated investment portfolios. Build a Legacy, Not Just a Business Setting up a pension plan encompasses more than tax efficiency or compliance — it also creates lasting security for employers and employees. It’s an investment in your business’s future and contributes to reducing old-age poverty, strengthening the nation’s economy. Entrepreneurs support national development by offering pensions and creating a more resilient society. "Failing to prepare is preparing to fail," as Benjamin Franklin said—so build a foundation of economic security for future generations! Let RFS help you set up your pension fund.

Circulars issued by the Fund

	The Benchmark Retirement Fund did not issue any new circular or announcement after - 202502 – Risk benefits provided via the fund Clients are welcome to contact us if they require a copy of any circular.


NEWS FROM RFS

Veueza Kangueehi promoted

	Veueza Kangueehi was promoted to Senior Manager of Fund Accounting in our Benchmark division, taking over the position of Frieda Venter, who retired at the end of March. Veueza brings over a decade of specialised pension fund industry expertise to her role, having previously served at Alexander Forbes before joining RFS in 2016. She is advancing her academic credentials through a Master of Philosophy in Development Finance at the University of Stellenbosch, building upon her Honours degree in Business Management and Bachelor of Technology in Accounting and Finance from the University of Science and Technology. Her commitment to leadership excellence is further demonstrated through her Certificate of Transformational Leadership from the African Leadership Institute. We congratulate Veueza wholeheartedly on her promotion and wish her well in her new role!

RFS encourages complaints and fraud reporting

	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.


Elevate your fund experience with EPIC

	Members of funds administered by RFS can now access EPIC, its member communication platform, if the trustees agree to make the platform available to members. Members can access benefits and investment values online from any place at any time. Members of the Benchmark Retirement Fund take note that they have similar functionality through Benefit Counsellor. We encourage our fund members to make the best use of these facilities.

The RETIREMENT COMPASS

	RFS Fund Administrators sponsor this newsletter as part of their 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. This issue covers the following insightful articles: Risk benefits through a retirement fund or an employer-owned scheme; How Namibia’s oil discovery could affect retirement savings; Retirement savings in southern Africa. Don’t miss out on the latest Retirement Compass (vol 2, no 1) here...

Important circulars issued by RFS

	RFS issued no new circular after the circular RFS 2025.04-02 - Subject: Office Closure Clients are welcome to contact us if they require a copy of any circular.


NEWS FROM NAMFISA
NAMFISA Publishes Proposed Standards under the FIMA

	Government Gazette 8659 of 9 June 2025 contains the following FIMA general standards for public consultation: GEN.S. 10.3 – Appointment and termination of auditors: applies to all financial intermediaries and financial institutions required to appoint an auditor and to auditors appointed under section 401. GEN.S. 10.4 - Appointment and termination of valuators: applies to all financial intermediaries and financial institutions that are required to appoint a valuator and to valuators so appointed under section 402. GEN.S. 10.5 - Appointment and termination of principal officers: applies to financial intermediaries and financial institutions. GEN.S. 10.28 – Application for amalgamation or transfer of any business from and/or to a financial institution or financial intermediary in terms of section 449: applies to all financial institutions and financial intermediaries other than beneficiary funds and retirement funds. The public impacted by the implementation of the FIMA is invited to submit comments in the prescribed format on or before 11 July 2025. Enhancing Trustees’ Fiduciary Duties NAMFISA presented a seminar on 18 June titled ‘Enhancing trustees’ fiduciary duties: protection of pension funds’ assets. If you missed the seminar and the presentations, find them in this link. Note by the editor One of the speakers relies on Section 7C to elucidate the trustees’ fiduciary duties. This section was introduced in South Africa in 1996 and does not apply to Namibia. In Namibia, trustees’ fiduciary duties still derive from common law.


LEGAL SNIPPETS

Adjudicator Determination concerning the death benefit allocation in Bester v CRAF
	This complaint relates to the payment of a death benefit under section 37C(1)(a) of the Act, in particular, to being excluded from sharing in the distribution. Summary of Determination: Case Overview: The complainants, Mark Bester and Karin Bester, lodged a complaint against the Central Retirement Annuity Fund regarding the distribution of death benefits following the death of their father, Mr. JJ Bester. They were excluded from the death benefit payout, which was awarded to their father’s estranged wife, Sylvia Bester. The complaint concerns the interpretation of Section 37C(1)(a) of the Pension Funds Act and the legitimacy of a consent form signed by Sylvia Bester. Agreed Facts: Deceased Member’s Background: Mr. Bester and Sylvia married in 1987, but their marriage was troubled. After years of marriage, they divorced in 1991, only to remarry in 1994. This remarriage, however, did not heal the underlying issues between them. The couple continued to experience emotional and financial difficulties, which deepened after their reconciliation. By the time of Mr. Bester’s death in 2000, their relationship was strained to near separation. Evidence suggests that the couple had been living apart, and Mr. Bester had begun divorce proceedings. Sylvia’s financial situation at the time of Mr. Bester’s death was precarious. She was 55, struggling with limited income and poor financial resources. In contrast, the complainants, Mark and Karin, were financially independent and had stable incomes. While Sylvia and Mr. Bester were estranged in the period leading up to his death, it was acknowledged that Sylvia had cared for him during their marriage, despite the emotional and physical challenges they faced. The deceased nominated Mark as a beneficiary in 1997 and Karin in 1998, each on separate life annuity policies. Mr. Bester passed away on 24 February 2000, leaving his wife Sylvia, and his two children (Mark and Karin) as his dependants. Death Benefit: Two life annuities became payable as a death benefit from the CRAF. The annuities had commencing values of R535.89 and R554.60. The fund determined that the benefits would go entirely to Sylvia Bester, the deceased’s second wife, due to her greater financial need. Disputed Facts: Consent Form: Mark and Karin argued that they were entitled to the death benefits based on their father’s nominations and a consent form signed by Sylvia Bester as executor of the deceased’s estate. The form confirmed her agreement to distribute the death benefits to the complainants. Sylvia Bester claimed that she signed the consent form under undue influence from Mark, who was "domineering" and threatened her with legal action if she did not comply. Complainants’ Arguments: Nomination as Beneficiaries: The complainants argued that because their father had nominated them as beneficiaries on the respective life policies, they were entitled to the death benefits. Consent Form: They further contended that Sylvia Bester’s consent to distributing the benefits to the complainants, as evidenced by the signed consent form, made them entitled to the benefits. Respondent’s Arguments (Fund’s Position): Invalid Consent Form: The respondent, represented by the fund, argued that the consent form was improperly completed under duress, citing Sylvia Bester’s statement that Mark had coerced her. Equitable Distribution: The fund argued that, under Section 37C(1)(a) of the Pension Funds Act, it had the discretion to distribute equally among the dependants, considering factors such as financial need and age. Despite her estrangement from the deceased, the fund decided that Sylvia Bester should receive the full benefit due to her more pressing financial difficulties. The fact that both children were financially independent of the deceased with stable incomes played a crucial role in the fund’s decision to award the annuities solely to Sylvia. The fund took into account Sylvia's severe financial hardship and her limited ability to earn a living, which justified the decision to allocate the death benefits to her, even though she and Mr. Bester were no longer in a harmonious relationship. Legal Principles Applied: Section 37C of the Pension Funds Act: The key provision in this case is Section 37C(1)(a), which governs the odistribution of death benefits from pension funds. The fund must make an equitable distribution to dependants, considering various factors such as financial need, age, and the deceased's wishes. However, a nomination does not automatically entitle a person to the death benefit; it is only one factor among others. Equitable Distribution: The fund board is granted discretion to determine an equitable distribution of benefits, which irrelevant considerations must not influence, nor should it serve an improper purpose. Factors like the dependants' financial circumstances and relationship with the deceased must be considered. Undue Influence and Invalid Consent: The PFA ruled that the consent form, even if valid, would not have overridden the fund’s discretion under Section 37C. Furthermore, Sylvia Bester’s undue influence claim made the consent invalid in law. PFA’s Determination: Validity of the Consent Form: The PFA accepted Sylvia Bester’s account that the consent was signed under duress, concluding that the form was invalid. Equitable Distribution Decision: The PFA found no fault with the fund’s decision to award the full death benefits to Sylvia Bester, given her dire financial circumstances and limited earning capacity, which were deemed more pressing than the complainants’ situation. No Grounds for Intervention: Since the fund had acted within its discretion under Section 37C, considering all relevant factors, the PFA found no legal grounds to overturn the decision. This determination highlights several key principles: Discretion in Death Benefit Distribution: The Pension Funds Act does not automatically bind the fund to a nominee's wish. The board must exercise discretion and make an equitable distribution based on the specific circumstances of each dependent. Nomination and Consent Forms: While nomination forms and consent may influence the distribution, they are not determinative. It may be invalidated if the consent is obtained under duress or undue influence. Equitable Distribution Criteria: When distributing death benefits, factors such as the dependants’ financial need, the deceased’s relationship with them, and other relevant considerations must be considered. Protection from Estate Claims: Death benefits from pension funds do not form part of the deceased’s estate and must be distributed according to Section 37C, ensuring that dependants are provided for equitably. The case serves as a reminder that pension funds must balance the legal rights of beneficiaries with the fund’s responsibility to make equitable decisions. Read the determination by the SA Pension Funds Adjudicator here.



SNIPPETS FOR THE PENSION FUND INDUSTRY

The Five Worst Investment Decisions for Your Retirement

	The following summarises the key messages from this article. Choosing the Wrong Annuity Product At retirement, most people must use two-thirds of their savings to buy an annuity — either a life annuity (guaranteed income for life) or a living annuity (flexible income and investments). Life annuity: Protects against longevity and investment risk, but offers no control, and usually no inheritance for heirs. Living annuity: Offers flexibility and potential to leave an inheritance but shifts the risk and responsibility to you. Key takeaway: Carefully evaluate which annuity best suits your needs, income goals, and estate planning objectives. Drawing Down Too Much, Too Soon Many retirees are unsure if their savings will last, especially those using a living annuity. Overspending can deplete your capital too early. Use guidelines like the 4% rule as a starting point (withdraw 4% of your capital annually, adjusted for inflation). Your drawdown rate should consider: Time horizon Asset mix Fees Tools like annuity calculators can help you plan a sustainable withdrawal strategy. Paying Excessive Fees High fees on your retirement investments can seriously erode your income. Many retirees don’t know what they’re being charged. Example: On a R4.8 million pension with a 5% drawdown and 3% annual fees, 40% of your income could go to service providers. Request your Effective Annual Cost (EAC) from your advisor or provider and compare options. Panic Selling in Market Downturns Volatility in markets is inevitable, selling during downturns locks in losses. Retirement may last 20+ years, giving you time to recover from short-term dips. Emotional decision-making can permanently reduce your income potential. Stay focused on your long-term investment strategy and ensure your fund is structured to handle market fluctuations. Underestimating Your Retirement Expenses A vague or outdated budget can lead to unpleasant financial surprises. Common expense areas that may rise in retirement: Healthcare (especially for age-related diseases) Leisure and lifestyle (travel, hobbies, dining out) assume your expenses will automatically decrease. Create a detailed, realistic, and regularly updated budget to stay in control of your finances. Final Thought A stress-free retirement is possible, but it requires: Making informed decisions on annuities Managing drawdowns wisely Minimising fees Staying calm during market fluctuations Planning realistically for evolving expenses Being proactive, educated, and engaged with your retirement planning will pay off far more than hoping things “work out.” Read the full article by 10X Investments in Moneyweb of 14 May 2025 here.

Do I Still Need My Life Cover in Retirement?

	In answering this question, this article raises a few important points. Reassess the Need for Life Cover in Retirement Life insurance is important during certain life stages but may not be necessary in retirement. As income typically drops in retirement, it’s wise to cut unnecessary expenses, and life cover may be one of them. Life Cover Needs Evolve Over Time Young adults: Minimal need for life cover; income protection may be more important. Middle age: Life cover becomes crucial due to dependants, debt (like mortgages), and the need to replace income. Retirement: If debts are settled and dependants are financially independent, the need for cover may significantly decrease. Key Factors to Consider in Retirement If your retirement funds adequately support you and your spouse, continuing life cover might not be necessary. High premiums in later life could be better used for living expenses or other financial goals. Life cover might still be useful for: Covering estate costs (executor fees, estate duties). Providing liquidity in your estate. Supplementing a spouse’s income. Leaving a legacy or covering final expenses. Group Life Cover Continuation Options Some employer-provided life cover plans can be continued into retirement without medical underwriting, though they may come at a high cost. These options should be evaluated through a proper needs analysis. Emotional vs. Financial Decision Many retirees struggle to let go of life cover due to emotional attachment or long-term habit. A practical alternative: adult children can take over the premiums in exchange for receiving the payout. Seek Professional Advice A comprehensive needs analysis with a financial advisor is essential to making an informed, personalised decision. This applies not only to life cover but also to other financial decisions in retirement. The bottom line is that life coverage in retirement should be evaluated based on actual needs rather than habit or emotion. It may be reduced, retained, transferred to someone else or cancelled depending on your financial situation and goals. Read the full article by Justin Wendover in Moneyweb of 26 May 2025 here.


SNIPPETS OF GENERAL INTEREST

Choosing Your Trustees is a Defining Decision

	If you have or intend to establish a trust, the following is a concise summary of the key messages from the article: Choosing Trustees is a Critical Decision The long-term success of a trust depends on selecting trustees with skill, integrity, and strong moral character. Trustees take full legal control of the trust assets and are responsible for carrying out the trust founder’s intentions. Trustees Have Legal and Fiduciary Duties Governed by the Trust Property Control Act, trustees must act with care, diligence, and skill expected of someone managing another’s affairs. They must act in the best interests of beneficiaries, not the founder, and with utmost good faith. Their fiduciary responsibility is more demanding than that of a company director. Trustees Face Personal Liability Trustees can be personally liable for negligence or misconduct. They cannot be indemnified against personal liability, and a lack of knowledge is not a valid defence. They must keep trust assets separate from personal assets, avoid conflicts of interest, and act strictly within the limits of the trust deed. Required Skills and Independence Trustees must have financial, legal, and administrative competency. They should be able to read and understand the trust deed and legislation. They must be independent decision-makers, not swayed by the founder or others, especially important if family or friends are appointed. Financial and Administrative Responsibilities Even if trustees outsource tasks (e.g., accounting), they remain accountable for the outcomes. Responsibilities include: Maintaining accurate records and accounts. Ensuring sound investment decisions. Managing deadlines and statutory filings (e.g., taxes, Master’s Office). Performing secretarial tasks (e.g., meeting minutes, resolutions). Teamwork and Communication Are Essential Trustees often serve in teams and must collaborate, debating, discussing, and reaching decisions. Good interpersonal and communication skills are vital, especially for engaging with beneficiaries, including minor or disabled children. Summary: What to Look for in a Trustee When appointing trustees, choose individuals who: Understand and respect legal and fiduciary duties. Have appropriate financial and legal acumen. Can manage administrative complexity and meet deadlines. Communicate well and act independently and ethically. Collaborate effectively in a team. Final takeaway: Don’t choose trustees out of familiarity or convenience. Take the time to appoint qualified, principled individuals — the future of your trust and your beneficiaries depends on it. Read the full article by Craig Torr of Crue Investments in Moneyweb of 26 May 2025 here.

How to ensure a smooth estate administration

	Here’s a summary of the key messages from this article. Common Causes of Estate Administration Delays Original Will Cannot Be Located The original, signed will is required for the Master’s Office to appoint an executor. If it cannot be easily found, significant delays may occur. Dying Without a Will (Intestate) The Master must appoint an executor, which takes time. Distribution follows intestate succession laws, which may not reflect your wishes and could cause family conflict. Poorly Worded or Complex Wills Ambiguities or legal challenges can stall estate administration for years. Especially problematic in blended families or with multiple spouses. Incomplete Wills Failing to mention all assets or heirs may lead to partial intestacy. A missing residue clause complicates how the remainder of the estate is distributed. Inexperienced Executor A family member or friend with no fiduciary expertise is unlikely to be approved without professional support. Estate administration is specialised and best left to experienced fiduciary professionals. Missing Documents Essential documents like the death certificate, will, ID, marriage contract, etc., are needed to begin the process. Delays in submission stall the executor’s appointment and the entire winding-up process. Insufficient Estate Liquidity If there isn’t enough cash to cover debts and bequests, delays and asset sales may be necessary. This can cause disputes and complications, especially without a clear mandate in the will. Foreign Wills and Assets Holding assets abroad requires foreign probate, which can be slow and expensive. Jurisdictional and language barriers often worsen the delays. Practical Steps to Avoid Delays and Help Your Loved Ones Have a Professionally Drafted Will Drafted by a fiduciary expert. Keep at least three original copies in secure, known locations. Ensure loved ones know where it is stored. Update and Review Your Will Annually Reflect changes in assets, relationships, or wishes. Destroy older versions and use a revocation clause in the current will. Ensure Estate Liquidity Have regular liquidity assessments done by an estate planner to confirm that enough cash is available. Include a Residue Clause Prevents partial intestacy by addressing unallocated assets. Create an Estate Planning File Include all necessary documentation: ID, marriage/divorce certificates, asset inventory, etc. Plan for Practical Matters Firearms: Ensure safes are accessible and licences are in order. Online accounts: Leave clear instructions and passwords for closing accounts. Provide Funeral Instructions Include burial or cremation preferences to reduce emotional stress for loved ones. Make Provisions for Pets Especially important if you live alone — specify who will care for them. Final takeaway: Thorough estate planning is not just a legal task — it’s an act of love. Reducing administrative delays and confusion provides your family with clarity, comfort, and peace of mind during a difficult time. Read the full article by Devon Card of Crue Investments in Moneyweb of 30 May 2025 here.


AND FINALLY...

Wise words from wise men

	"When everything seems to be going against you, remember that the airplane takes off against the wind, not with it." ~ Henry Ford (1863 - 1947)


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