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| Issued August 2024 | ||||
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| In this newsletter... | ||||
| Benchtest 07.2024 – Navigating investment decisions, S37C and death benefits, the NPF and more... | ||||
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| IMPORTANT NOTES AND REMINDERS | ||||
NAMFISA levies
At its August meeting, BON announced that the repo rate is dropped by 0.25% from 7.75% to 7.50%. The interest rate on funds’ direct loans will consequently drop by 0.25% to 11.5% from 1 September 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... |
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
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 2023, here... |
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| IN THIS NEWSLETTER... | ||||
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In this newsletter, we address the following topics:
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In 'Tilman Friedrich's industry forum' we present...
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In 'Snippets for the pension funds industry,' read about...
As always, your comment is welcome, so open a new mail and drop us a note! Regards Tilman Friedrich |
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| TILMAN FRIEDRICH'S INDUSTRY FORUM | ||||
| Monthly Review of Portfolio Performance to 31 July 2024 |
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| In July 2024, the average prudential balanced portfolio returned 2.0% (June 2024: 1.7%). The top performer is Allan Gray Balanced Fund, with 3.6%, while NAM Coronation Balanced Fund, with 1.3%, takes the bottom spot. Old Mutual Pinnacle Profile Growth Fund took the top spot for the three months, outperforming the ‘average’ by roughly 1.2%. NAM Coronation Balanced Fund underperformed the ‘average’ by 1.5% 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 July 2024 reviews portfolio performances and provides insightful analyses. Download it here... |
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| Navigating investment decisions amid global uncertainty | ||||
| As a Namibian investor with a diversified portfolio, navigating the complexities of global financial markets has always required a thoughtful approach. However, the current international landscape presents unique challenges and opportunities. With geopolitical tensions escalating and economic conditions fluctuating across different regions, making informed investment decisions more crucial than ever. This article provides strategic guidance for those looking to invest their discretionary assets over the next one to two years and beyond. Understanding the current market landscape Before diving into specific investment strategies, it’s essential to understand the financial ratios and economic indicators that shape the global markets. Here’s a snapshot of the key financial ratios for major bourses:
The Monthly Review of Portfolio Performance to 31 July 2024 reviews portfolio performances and provides insightful analyses. Download it, here... |
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| Death benefits and S 37C envisages five scenarios | ||||
A few important points that are overlooked too easily, regarding the time frames for the payment of death benefits in case of each of the 5 different scenarios envisaged in section 37C:
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| Can a death benefit be paid in instalments? | ||||
| PFA section 37C specifies the time within which a death benefit must be paid. In broad terms, if the trustees established that there are no dependants, the benefit must be paid twelve months after date of death. If there are dependants, the death benefit must be paid once the fund is in mora. Where a debtor’s (the fund’s) liability is dependent upon the performance of certain conditions (e.g. as prescribed in section 37C), the debtor will not be in mora until a duty to pay arises (e.g. all dependants of a deceased needed to be and then have been determined and the trustees finalised the benefits allocation). Mora can arise where the creditor’s need is urgent and the delay in paying the creditor is unreasonable. The common belief that a fund’s duty to pay is contingent upon the expiry of the 12 month period referred to in section 37c is not correct. The duty to pay is not dependent on this but instead on whether the trustees are satisfied that they have investigated and considered with due diligence and are in a position to make a decision. Most trustees are familiar with the demanding process they need to follow when faced with the disposition of a benefit due in respect of a deceased member. Section 37C (2) then stipulates that “…the payment…shall be deemed to include a payment made by the fund to a trustee contemplated in the Trustee Moneys Protection Act…for the benefit of a dependant…” Section 37C thus makes no prescription as to the manner of payment but only explicitly allows for payment to a trust. As stated above the obligation of a fund making payment arises upon the fund being ‘in mora’ towards a dependant. This means that either all dependants have been identified or a dependant’s needs are urgent and a delay would be unreasonable. In practice trustees often believe that they have identified all dependants, but cannot be certain. This uncertainty exists mostly in the case of a deceased male member, where one can not be sure of his dependants. In such cases, the trustees must be mindful that dependants can still appear to lay claim on sharing in a benefit until 12 months following the member's death date have expired. In such a case, the trustees need to assess the needs of those identified dependants. Should there be an urgent need, mora arises, and the fund is obliged to pay. Since the quantum of the benefit due to the dependant in urgent need can only be determined upon expiry of the 12 months following the date of death of the member, or the identification of all dependants (whichever occurs last), in my opinion, the only manner in which the trustees can reasonably meet their obligation is to make one or more interim payments to those dependants with urgent needs of a portion of the full benefit that would be allocated to them in the event of no other dependants being identified subsequently and up to the expiry of the 12 months. |
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| More stakeholder engagement on the NPF | ||||
| With the help of the ILO actuary, the SSC presented the ILO NPF model to the pension funds industry consisting of RFIN, GIPF and NAMFISA on Friday, 02 August 2024. The same presentation was provided to employers about a month ago. SSC was also supposed to present the governance framework but did not present anything, indicating that none of the governance framework options formulated by Manfred Zamuee was acceptable to the Ministry of Labour. The presentation by SSC and ILO was also supposed to come up with a roadmap for the implementation of NPF. However, they had nothing to present in this respect to employers and the pension fund industry stakeholders. We understand that the SSC plans to continue with their consultations and will present the ILO NPF model that the government prefers to different stakeholders, including members of the public. The Namibia Employer’s Federation hosted a feedback and engagement session with its stakeholders on 7 August at NIPAM. The GIPF CEO, his legal experts, various principal officers of umbrella funds, a few large funds, ICAN and NASIA, attended the meeting. The purpose of the NEF consultation was to solicit views regarding the ILO NPF model and a plan of action in response. Marthinuz Fabianus is a member of the NEF committee that hosted this session. Here is feedback from a few high-profile attendees of the engagement session: “It was an informative session but, at the same time, very concerning regarding the possible unintended consequences an NPF would pose to the ecosystem. Perhaps the real focus should be on possible avenues of engagement that would yield desirable outcomes. The “SSC model” would be a better compromise. There must be a recognition that those covered by existing PFs don’t need to be brought into the net. What is the “ILO model” fixing for the existing PFs? Whatever must be fixed surely can and should be done with such funds. If at all necessary. The “ILO model” is opaque on governance and investment strategy. Admittedly I haven’t read the full report. But worried that the NPF would not be under the watch of Namfisa but managed and run by a yet-to-be-established team. Under whose auspices, no one knows!” ~ Asset management industry spokesperson “I was happy to receive the invite, and I found the session very informative especially the ILO influence. I believe Ramon articulated the key issue well. “What is it we want to achieve with the NPF”? If it is to provide “appropriate” or “adequate” income to all Namibian’s who are over a certain age, then we need to address the issue at the right platform and not try to fix or tamper with a system that is not broken.” ~ Former senior NAMFISA official |
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| COMPLIMENT | ||||
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Compliment from a Pension Administration Officer of a large employer
Dated 26 July 2024 |
“Yo! Elbie, I did not even blink and the PAYE was staring at me. LOL….. That was super fast. Appreciated.” |
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Read more comments from our clients, here...
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| NEWS FROM RFS | ||||
| RFS celebrates its 25th anniversary! | ||||
| As we mark this incredible milestone, we extend our heartfelt gratitude to our valued partners, clients, shareholders, and dedicated employees. Your trust, support, and hard work have been the cornerstone of our journey. Together, we've built a legacy of integrity, innovation, and excellence. Thank you for being an essential part of RFS Fund Administrators. Here's to the next 25 years of shared success and growth! |
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| RFS welcomes new (and old) staff members | ||||
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We are delighted to announce that Vesoreendo Poulletter Kangootui will join our permanent staff as a pension fund administrator in the RFLAUN team on 1 August 2024. Pouletter is an experienced human resources practitioner. She holds a Bachelor of Human Resources Management Honours from NUST. She joined RFS from !Kharos Benefit Solutions, where she held the position of payroll administrator. She started her career in the personnel department of Air Namibia in 2016. She is married, and the couple have a son and a daughter.
We also happily welcome back an ‘old face’, Riduwone Farmer. Riduwone will re-join our permanent staff complement on 1 September as a Benchmark Client manager. He served a portfolio of Benchmark clients as a client manager for just more than 5 years before he left Namibia in September 2022 for Germany, where his wife served in the Namibian embassy. His former clients will no doubt be thrilled having him back! Riduwone is well-known in our industry. He started his career at UPA in 1998, under our former managing director, and became part of Alexander Forbes with the merger. He gained experience in almost all administration related fields over a period of more than 20 years with AlexForbes and RFS. Riduwone holds a bachelor’s degree in business administration. We warmly welcome Poulletter and Riduwone to the team and look forward to their contribution to ensuring their RFLAUN and Benchmark employers rest easy, knowing that RFS is attending to their retirement nest egg. We are confident that their friendly and outgoing personalities will be complement our team well. We wish Riduwone and Poulletter all the best in their roles and look forward to having them around for many years! |
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| The RETIREMENT COMPASS | ||||
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Sebastian Frank-Schulz, Senior Manager of Client Services, Benchmark, and editor of the Retirement Compass, recently finalised the second edition of our newsletter for pension fund members.
RFS Fund Administrators sponsor this newsletter as part of its social responsibility and its initiatives to support the retirement fund industry. This newsletter 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 here... |
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| RFS sponsors Ruimte PS netball dresses | ||||
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Leana Rickerts, Client Manager of the Benchmark Retirement Fund, arranged with RFS to sponsor sports uniforms for the netball team of the Ruimte Primary School in Rehoboth. In the picture on the left, she hands the uniforms to the netball coach and teacher at Ruimte Primary School, Mrs Husselman. The other images show how the team looks in their new netball uniforms.
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| Important circulars issued by RFS | ||||
RFS issued the following circulars in August:
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| LEGAL SNIPPETS | ||||
| Pension Funds Law: Adjudicator's Determination in NG Mkhungo vs Trentyre Provident Fund and others | ||||
| This article analyses a recent determination by the Office of the Pension Funds Adjudicator concerning the non-payment of a death benefit under the Pension Funds Act, 24 of 1956 (the "Act"). The determination highlights crucial legal principles governing the administration and distribution of pension benefits, particularly death benefits. We will explore pension fund boards' legal obligations, beneficiaries' rights, and the Adjudicator’s role in resolving disputes. Background of the Case In this case, the complainant, NG Mkhungo, brought a complaint against the Trentyre Provident Fund (the first respondent), NBC Unclaimed Benefit Fund (the second respondent), and NBC Fund Administration Services (the third respondent). The dispute arose from the first respondent's failure to pay a death benefit following the death of Mr. Weideman, a member of the fund. Legal Framework: Section 37C of the Pension Funds Act
The determination underlines the critical importance of adherence to the legal duties imposed on pension fund trustees. Failure to comply with these duties can result in significant financial liabilities and reputational damage. This case serves as a reminder of the importance of proper governance, timely decision-making, and diligent communication in managing pension funds. Editor’s note: The Namibian PFA does not contain an equivalent to section 7C, common law would likely impose a fiduciary duty on the board to act in the best interests of members and beneficiaries. Namibian courts will likely follow the same principles set out in this determination. Read the determination here... |
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| Adjudicator determination: NE Lipali v Afrox Provident Fund and Others | ||||
| In this case, the Adjudicator reconsidered a determination after the original determination was set aside by the FST and remitted because the deceased's siblings were not added as parties to the original complaint. The deceased passed away, leaving behind two siblings and a nominee. The nominee used to be the deceased's fiancé. However, their relationship had ended four years prior to his death. Before his death, he informed a work colleague that he intended to substitute his former fiancé with his sister as a nominee. Shortly before his death, he visited the employer's HR department with his siblings to collect a beneficiary nomination form and nominate his sister. However, he was unable to complete it before his death due to his ill health. The deceased's siblings indicated that upon leaving the HR department, he informed them that he had impregnated a woman many years ago and that he wished to contribute towards the child. After that, he attended with his brother at the woman's last known place of employment, and they were told that the woman's whereabouts were unknown. Her employers were unaware that the woman was pregnant at any stage. The deceased's parents had predeceased him. He passed away intestate on 3 December 2019. The siblings claimed that 100% of the death benefit should be paid to them as they fell into all three categories of dependants, i.e. legal, factual and future. The ex-fiancé claimed that she was a nominee and that she should accordingly be paid the death benefit. The fund resolved that:
Editor’s note: The Adjudicator pointed out that under South African common law, a person can become liable to maintain their siblings if two factors are present, viz. the sibling must be needy (in the true sense of the word), and the sibling must be unable to claim maintenance from their blood relations that fall within the first degree of consanguinity, i.e. their parents or their children. Namibia introduced the Maintenance Act No. 9 of 2003 in 2011, which prescribes certain maintenance obligations, such as a parent regarding his children or a child regarding his parents under certain circumstances. However, Section 2(b) of the Act states that it “must not be interpreted to derogate from the law relating to the duty of persons to maintain other persons.” This Act, therefore, does not derogate from any common law obligations to maintain other persons, and Namibian courts will likely follow the same principles set out in this determination. From the Pension Fund Adjudicator’s annual report 2022-2023. |
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| SNIPPETS FOR THE PENSION FUND INDUSTRY | ||||
| Beware of these big retirement risks | ||||
| Retirement in South Africa has several financial risks, making effective planning crucial for maintaining wealth and lifestyle. The retirement journey can be divided into three phases: Active, Passive, and Supported, each with different financial needs. Three Phases of Retirement:
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| Dreaming about retirement? Keep these factors in mind! | ||||
| Whether you are still young or approaching retirement, preparing for retirement is always a good idea, and it will bring about significant changes in your circumstances. When you plan for retirement, consider the following factors. Financial Considerations
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| SNIPPETS OF GENERAL INTEREST | ||||
| Three things Steve Jobs did every night to sleep better | ||||
| Steve Jobs was well known for being one of the most driven, hard-working, and successful innovators ever. He did three things each evening: rest, recharge, and get a good night’s sleep. Jobs would drink hot herbal tea after dinner each evening, with herbs such as lemon verbena coming from his garden. Drinking herbal tea has been proven to remove toxins from the body, aid digestion, and help you relax. The tech innovator would then go for a walk in the evenings, which has been proven to improve sleep quality. Jobs was an avid walker and often opted for ‘walking meetings’ rather than sitting in a conference room. It has been reported that Jobs would spend the final hour of his day meditating or listening to music. Studies have shown that relaxing music can lower your blood pressure, reduce stress, and aid sleep. Meditation can help us lower our heart rate, slow our breathing, and increase our chance of sleeping well. | ||||
| Who owns your employees' inventions – lessons from the ‘call me saga’ | ||||
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This article highlights the importance of addressing intellectual property (IP) ownership in employment contracts to avoid legal disputes between employers and employees. It uses the "Please Call Me" case as example, where Vodacom's ex-employee Kenneth Makate claimed compensation for an idea he developed while working at the company. Despite his verbal agreement with a Vodacom director, the company refused to pay him, leading to prolonged court battles, with the final compensation potentially amounting to billions of rand.
The article emphasises that, under common law, IP created by employees during their employment typically belongs to the employer. However, disputes can arise when employees claim their inventions were made outside the scope of their employment. To prevent such IP disputes, the author recommends that employers clearly outline IP ownership in employment contracts, ensuring that any IP created during employment belongs to the employer, regardless of the circumstances. Steps for Employers to Secure IP Rights:
Read the full article by Pyper Turner Inc, Chartered Accountants, here...
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| AND FINALLY... | ||||
| Wisdom from great philosophers | ||||
| "Ideologies separate us. Dreams and anguish bring us together." ~ Eugene Ionesco 1909 – 1994 (French-Romanian author) | ||||
| Unsubscribe If you do not want to receive these newsletters {unsubscribe}click here...{/unsubscribe} 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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