2020 amm invite 600
  Benchtest Newsletter
Issued March 2022
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In this newsletter

Benchtest 02.2022, RFS’ fees are fair and transparent, Minister’s last chance on FIMA consequences and more...

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Important notes & reminders

  NAMFISA levies
  • Funds with February 2021 year-ends must submit their 2nd levy returns and payments by 25 March 2022;
  • Funds with August 2021 year-ends must submit their 1st levy returns and payments by 25 March 2022; and
  • Funds with March 2021 year-ends must submit their final levy returns and payments by 31 March 2022.
  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)
  • Kristof Lerch (tel 061-446 042)
  • Christina Linge (061-446 6075)
  Registered service providers

Certain pension fund service providers must register with NAMFISA and must report to NAMFISA regularly. Download a list of service providers registered at June 2021, here...
  Toolbox for trustees

RFS provides comprehensive support for trustees. Find a list of download documents to assist with governance and management of private funds, here...



In this newsletter, we address the following topics:
  In ‘Tilman Friedrich’s industry forum’ we present:
  • Monthly review of portfolio performance – 28 February 2022
  • RFS stands for fair and transparent fees
  • FIMA bits and bites – retirement capital preservation under FIMA
  • FIMA bits and bites – the employer cannot recover damages from the employee
  • FIMA bits and bites – the Minister’s last chance to prevent unintended consequences
  • Forget yesterday’s winners, instead find yesterday’s loser that may shine tomorrow
In Benchmark – a note from Günter Pfeifer read about
  • Important circulars the fund issued
In ‘News from RFS’ read about…
  • Long service awards complement our business philosophy
  • Important circulars issued by RFS
In ‘News from NAMFISA’ read about
  • 23 March industry meeting postponed
  • Multiple cessions of life insurance policies
  In ‘Legal snippets’ read about
  • A fund cannot withhold benefit without a compensation order
  • Employer is entitled to pension fund deduction after double salary payments
In ‘Snippets for the pension funds industry’ read about
  • ·Blending solutions for an optimal retirement income
  • ·Is now the right time to invest in equities?
  • How does stagflation impact investment returns?
In ‘Snippets of general interest, read about
  • War and your wealth
  • Game changing markers for SA socio-economic advancement – can Namibia learn?
  • An early inheritance: Considerations and options
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!

Tilman Friedrich
Tilman Friedrich's industry forum

Monthly Review of Portfolio Performance
to 28 February 2022

In February 2022, the average prudential balanced portfolio returned 1.2% (January 2021: -1.3%). The top performer is Hangala Prescient Absolute Balanced Fund with 2.4%, while Old Mutual Pinnacle Profile Gowth Fund with 0.5% takes the bottom spot. For the 3-months Hangala Prescient Absolute Balanced Fund takes the top spot, outperforming the ‘average’ by roughly 3.1%. NAM Coronation Balanced Plus Fund underperformed the ‘average’ by 1.4% 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 28 February 2022 provides a full review of portfolio performances and other insightful analyses.  Download it here...
Will China side with Russia, and what could be the implications
In a recent interview with Ed D’Agostino of Mauldin Economics on the Russia/Ukraine conflict and the current political climate for investors and the world, George Friedman, chief executive officer of Geopolitical Futures, made some interesting comments of which somewhat cynical in my opinion. He believes that President Putin’s objective is to move the Russian Federation’s borders back to those of the old Soviet Union and that the invasion of Ukraine was a vital and logical move to restore Russia’s national security. It makes a great deal of sense says Friedman, but it threatens western security. He points out that everyone, including President Putin and himself, underestimated the power of the American economy and the Dollar as global trade takes place in Dollars. Anyone without access to Dollars cannot trade internationally. He points out that the talk about a multipolar world is an illusion. The US economy towers over all other economies, and it is still a unipolar world. He points out that it is not a high priority to save President Putin’s face to the US. He believes President Putin gambled and lost, and it is more important to demonstrate to the world what it means to challenge the US. The US cannot give President Putin what he wants and has to force him backward. It will achieve this using economic measures instead of any military intervention. Whichever force the west applies will cause some form of pain, in this case, economic pain, but that is better than seeing soldiers dying.
The Monthly Review of Portfolio Performance to 31 January 2022 provides a full review of portfolio performances and other insightful analyses. Download it here...

RFS stands for fair and transparent fees
We have recently heard of a few instances where service providers offer clients fees that are way below the market and way below those they offered in the past. The explanations offered for such low fees are likely ‘own efficiencies’ through a ‘cheaper operational modus’ and RFS being inefficient or overcharging its clients.
I am not convinced that working from home is operationally more efficient than working from the office. Coordinating client servicing is much more difficult where a team and not an individual provides the service, as in retirement fund administration. Suppose one pays every employee working from home a fair rent and compensation for other occupational and operational costs. In that case, the aggregate thereof is likely higher than the equivalent costs for an office scenario. Perhaps an employer can get away with reduced costs for a while until the employees realise their actual costs of working from home. It is not sustainable, not fair employment practice, and cannot significantly reduce operational costs. Any service provider who is aware of these downsides of working from home will likely recover the income loss from the client. Such a strategy will not serve the service provider’s or its client’s interests in the long run.
Professional ethics require a service provider to determine his fees fairly and transparently. These principles mean that the customer should pay a fee based on time spent and the service provider’s expertise.
RFS subscribes to this philosophy in determining the fees it recovers from clients for the services it provides. RFS will not exploit a situation to benefit at the cost of its client, but RFS also expects its clients to apply the same principles and not try using a situation to its advantage at RFS’ cost.
RFS applies the following methodology to be fair towards its clients.
  1. Firstly, we use a fee model to determine empirically the fee we should recover for new clients and new services.
  2. Secondly, we calculate a recovery rate for each income stream and staff level to recover
    1. its direct costs;
    2. its indirect costs;
    3. its overhead costs;
    4. a typical profit margin for an employee benefits provider.
  3. Thirdly, we employ a time tracking system (probably unique amongst all service providers in our industry).
    1. It tracks each employee's daily time and time value (calculated per 2.) per client and revenue stream.
    2. We summarise the total client billing per year per client and income stream.
    3. We review our current fees annually based on the time staff has billed.
    4. If the annual fee review shows that we over-or under-recover over three years, we will take corrective action so far as we can.
  4. Client billing is often very volatile from one year to the other due to:
    1. RFS assigning a new employee to a client;
    2. the client introducing or terminating a facility or service;
    3. the client changing the fund structure;
    4. the client's membership increasing or reducing significantly;
    5. client meetings are growing in number or time spent;
    6. new legal or client-specific requirements.
The preceding exposition does not address any questions concerning our operational efficiency, profit margin, and hourly rates. In our industry, one can measure operational efficiency as the ratio of fund members, pensioners, and housing loans to total company staff. One can determine the profit margin from a company’s annual financial statements. The annual financial statements are only available for listed companies, but there are no listed companies in our industry in Namibia. Lastly, suppose one is satisfied that the company operates efficiently and achieves a normal profit margin. In that case, the hourly rate must be reasonable as it produces the profit margin based on an efficient operation. While the profit margin and the efficiency indicator of service providers in our market in Namibia is not public information, we are transparent and, therefore, happy to stand up to comparison. Funds going out on tender can consider asking the tenderer to provide such information and supporting documentation in its tender submission!
FIMA bits and bites – retirement capital preservation under FIMA
FIMA obliges fund members to preserve at least 75% of their retirement capital from 1 October 2022 (if the Minister decides to declare this the effective date for FIMA).
That much is clear, but if you have already preserved or will preserve under the previous Pension Funds Act regime, can you still have it all paid out to you within three years of its preservation? Our advice is that you may only withdraw 25% of the capital you preserved before 1 October 2022.
If you preserve after 1 October 2022, you cannot access your retirement capital until you reach early retirement under the fund’s rules whose capital you preserve after 1 October 2022.
FIMA bits and bites – the employer cannot recover damages from the employee
Under the Pension Funds Act, an employer may direct its retirement fund to deduct any damage caused by the employee to the employer through the employee’s theft, dishonesty, fraud, or misconduct –
  • if the employee admitted liability in writing to the employer or
  • the employer obtained a judgment against the employee in any court. 
FIMA has no similar provision. An employer can no longer claim any damage caused by its employee from his retirement fund.
FIMA bits and bites – the Minister’s last chance to prevent unintended consequences
Unfortunately, the FIMA passed the parliament without much discussion and deliberation and appeared in the government gazette. The Minister is now required to publish an effective date for FIMA to become Namibia's new non-banking financial services laws.
Employers are currently not obliged to provide retirement benefits to their employees. Unfortunately, chapter 5 of the FIMA, the new retirement funds law, poses severe risks for employers and imposes strict obligations on employers. Other than those, it offers no benefits to the employer unless the employer wants to assume a paternalistic role towards its employees.
Employers who currently have a retirement fund would find it difficult to get out of this arrangement from the moral and the labour law perspective. Anyone setting up a new business in the future will think twice about offering a retirement fund.
Namibia must either introduce legislation compelling employees to participate in a retirement fund or amend the retirement funds chapter to be more acceptable for employers.

Forget yesterday’s winners, instead find yesterday’s loser that may shine tomorrow!
At the beginning of 2009, after the global financial crisis (GFC) struck, I often heard members and employers lamenting about poor equity returns and regretting they had not instead invested in cash. The picture in their minds was that reflected in graph 6.1. This graph shows the rolling three-year returns. Notice how cash, represented by the black line, outperformed the average prudential balanced fund (red line) and the JSE Allshare Index (blue line) by between 5% and 10% per year from December 2008 until August 2010. Long before the GFC struck, I cautioned that our share market was high and risky. Unfortunately, I expected a correction about three years too early.
Graph 6.1
I had the picture of graph 6.2 in my mind when I spoke about our concern that the market was high and waiting for an opportunity for its correction. Also, notice a seven-month time gap between the start of graph 6.1 and the end of graph 6.2. That is all it takes to move from exuberance to despair! No one would have moved out of equities in these seven months. The average prudential balanced fund and equities outperformed cash by more than 20% per year!
Graph 6.2

So, where are we today? Graph 6.3 shows that the average prudential balanced fund and equities, in particular, took a deep dive well below cash, which ended in May 2011. Fortunes turned for the average fund and equities to outshine cash for the next three years until the middle of 2015. Again fortunes turned for equities until the end of 2020. We see that equities and the average prudential balanced fund went well past cash on a rolling three-year basis from the middle to 2021. Does this mean equities and the average prudential balanced portfolio are on track to their sustained outperformance of cash?
Graph 6.3

Graph 6.4  shows the JSE Allshare index in blue compared to the S&P 500 in red. We removed the effect of local inflation from the two lines. We note that SA equities did not grow until 2004 when the global commodities bubble developed. It ended with the GFC in 2008. The index after that doubled in real terms but remained at that level, again to the end of 2020. Since 2021 it ticked up again. The red S&P 500 line shows little growth until 1994. It then developed the tech bubble that ended abruptly in March 2000. We note the GFC crisis impacting the red and blue lines in 2008. Since then, the S&P 500 only knew one direction, but look closely at the last month or two. Commentators are referring to this run as the dot.com bubble. Will it burst, or will we see a gradual, drawn-out correction that already set off?
Graph 6.4

A stock index reflects what shareholders are paying for shares. Two factors determine what shareholders will pay for the shares they buy. Firstly, the income the companies generate is commonly referred to as ‘earnings.’ Secondly, how much the shareholder would invest for the shareholder’s income on his investment. So, if you expect an income from an investment of N$ 12,000 per year and you pay N$ 120,000 for the investment, you paid ten times its earnings. We say the price: earnings ratio is ten. When everyone wants to buy the same share, but only a few persons are willing to sell it, the seller will sell the share to the person who offers the highest price. That will push up the price and the price: earnings ratio. Often buyers’ sentiment results in an imbalance between the number of shares up for sale and the number of shares people want to buy. That either lifts or reduces the price: earnings ratio.
Returning to stock markets, graph 6.4 reflects the SA Allshare Index and its price: earnings ratio. The index shown as the red line, increased steeply while the price: earnings ratio dropped steeply over the last few months.
Graph 6.5

Now, compare the SA Allshare Index with the broader US S&P 500 Index in graph 6.5. Here we see that the S&P 500 increased steeply since the GFC. It only dipped slightly over the last few months. As for the JSE Allshare price: earnings ratio, the S&P 500 price: earnings ratio dropped steeply recently. But consider a crucial difference: the current SA price: earnings ratio of 12.4 is well below its long-term average of 14.9%. The current S&P 500 price: earnings ratio of 26.2 is well above its long-term average of 22.4. The obvious question is: why did the price: earnings ratios of both indices drop so sharply over the recent past? It means one of two things: either the investors do not pay as much as before, or earnings have increased steeply.
Graph 6.6

Graph 6.6 now lifts the secret. See how sharply earnings increased, particularly over the recent past, recovering much more than the loss CORONA caused, and in SA much sharper than in the US. Again we are faced with two questions: what caused the recent sharp increase in earnings and is this increase sustainable? If it is sustainable, the equity markets will continue running, and the converse.
Graph 6.7

Different factors influenced the increase in earnings. For one, low interest rates elevated shares to the main investible alternative, pushing up the investor demand for shares. Fiscal stimulus assisted consumer demand hard hit by the economic impact of COVID. These two factors caused a steep increase in global inflation rates that now threaten the global economy. The disequilibrium in financial markets caused by low interest rates and fiscal stimulus is not sustainable and is up for correction this year. The Federal Reserve and the ECB are reducing their bond-buying programmes and contemplating lifting interest rates. The mere talk of rising interest rates caused the latest dip in the S&P 500. The stock markets produced clear winners and clear losers after the COVID crisis. Yesterday’s winners are unlikely to continue their winning streak while yesterday’s losers may shine again. I cannot see stock markets continuing their trajectory this year. Maybe I am over-cautious like I was in the run-up to the GFC.
Investors who align with my thinking and expectations should tread carefully. Forget to chase yesterday’s winners: instead, find yesterday’s losers that will shine tomorrow! If you find the right ones, you should achieve respectable returns on your shares investments this year If you find the right ones, you should achieve respectable returns on your shares investments this year. Diversify your risk by spreading it across assets and asset classes as widely as possible. An investment in a well-diversified, prudential balanced portfolio should generate a real return of around 5% or 10% in the prevailing inflationary environment. Offshore diversification is essential, and the Rand’s strengthening once again creates the opportunity for doing so. One needs to focus more on this principle than the timing, though, as the Rand tends to rise when offshore markets also increase, and vice-versa, often negating the effect of its strengthening or weakening.

The Monthly Review of Portfolio Performance to 28 February 2022 provides a full review of portfolio performances and other insightful analyses. Download it here...
Tilman Friedrich is a chartered accountant and a Namibian Certified Financial Planner® practitioner, specialising in the pensions field. He is co-founder, shareholder, and Chairman of the RFS Board and retired chairperson, and now a trustee of the Benchmark Retirement Fund.


From an actuary
Dated 7 December 2021
  “Hi A
Thanks very much, you are a legend in your own lifetime.

Read more comments from our clients here...


A note from Günter Pfeifer

Important circulars issued by the Fund

The Benchmark Retirement Fund issued the following circular. Clients are welcome to contact us if they require a copy of any circular.
  • 202202 – Survivor annuity – changes to investment portfolio  
Günter Pfeifer is Principal Officer and was formerly a trustee of the Benchmark Retirement Fund. He holds a Bachelor of Commerce (Cum Laude). He completed his articles with Deloitte & Touche. He completed the De Beers ‘Program For Management Development’ at Gordon Institute for Business Science, and the Advanced Development Program at the London Business School. He was formerly Financial Manager of De Beers Marine.

News from RFS

Long service awards complement our business philosophy
RFS’ business is primarily about people and only secondarily about technology. Every time a fund changes its administrator, it loses substantial fund information and knowledge. Similarly, every time the administrator loses a staff member, our clients lose corporate memory. As a small Namibian organisation, we cannot compete with large multinationals technology-wise because of global IT systems' economies of scale and sophistication. We differentiate ourselves through excellent personal service and commitment to our clients. We are proud of our staff retention as we know that it is the key to our success!

Ina Jooné-Bester celebrated her 15th work anniversary at RFS! We express our sincere gratitude to Ina for her loyalty and support over all these years and congratulate her heartily!
We look forward to her indispensable loyalty and dedication to the company in the years to come!
Important circulars issued by RFS
RFS issued the following circulars. Clients are welcome to contact us if they require a copy of any circular.
  • RFS 2022.01-02: Road to FIMA implementation #2 – Contribution Schedules   


Your payroll, HR and IR partner
Do you consider sending your payroll employees to the gym to bulk up so they can cope with cumbersome HR processes? Leave the hefty lifting !Kharos Benefit Solutions and enhance your employees’ experience through a partnership with !Kharos Benefit Solutions.
Empower your employees with our Employee Self-Service portal which allows them to take control of their personal details, documents, and requests.  Rid your HR office of time-wasting activities which affects their efficiency negatively and empower them with decreasing turnaround times.  Activities like applying for leave, requesting permission for overtime, or claiming traveling and subsistence, should not take days to complete approve and process, but minutes.
How many hours are wasted in your company by reworking mistakes made in a paper-based process?
Have your HR managers been reduced to Checking Clerks?  Does your HR department merely survive through death by checking?
At !Kharos, our Payroll Professionals lighten the load of Statutory Compliance and Legislation issues, through our professional relationships and direct system integration.  As Payroll Processing demands higher flexibility, companies are driven towards consistent automation.
While partnering with !Kharos, your HR department is freed from monotonous repetitive frustrating hours of processing, as we provide, from as easy as bulk inputs to complex system generated templates for payroll inputs, creating efficiency and time saving in activities like salary increases, attendance and leave management, etc.
How up to date are your Industrial Relations (IR) records?  Is your company still conducting IR processes manually?
Ensure your company’s risks are minimized and eradicate errors resulting in costly consequences through a partnership with !Kharos.  We remove the endless paper from your IR processes, by having all related soft copies stored in one space with remote access.  Your external IR consultant will get access to your IR processes, closing any communication gaps. We ensure that every IR process initiated and processed in your company follows the intended policy implemented by you, on time, every time.  Audit trails gives you access to every action; who, what, when; removing any uncertainties.
Leave the hefty lifting to us and enhance your employees’ experience through a partnership with !Kharos.
For a live System Demonstration, contact
  • This email address is being protected from spambots. You need JavaScript enabled to view it., or
  • This email address is being protected from spambots. You need JavaScript enabled to view it.

News from NAMFISA

23 March industry meeting postponed
NAMFISA informed the pensions industry that it cancelled the industry meeting that was to have taken place on 23 March and that there will be no industry meeting in the first quartetr of 2022.
Multiple cessions of a life insurance policy
A joint statement by NAMFISA and the Bank of Namibia announces that insurers and banks can now accommodate multiple sessions on a single life insurance policy.
Whenever a person took up credit from any financial institution, the financial institution would require the person to cede a life insurance policy. The policy proceeds would redeem any loan balance should the borrower pass away before repayment of the loan. Should this person take up a further loan from another financial institution, that institution would require the person to take out another policy that the person must cede to that institution.
With immediate effect, if the first policy’s insurance cover exceeds the value of the first loan, the borrower can now offer the excess cover under the first policy to secure the second loan, and so on.


Legal snippets

A fund cannot withhold benefit without a compensation order
Section 37C of the Pension Funds Act allows an employer to direct its retirement fund to deduct any damage caused by the employee to the employer through the employee’s theft, dishonesty, fraud, or misconduct –
  • if the employee admitted liability in writing to the employer or
  • the employer obtained a judgment against the employee in any court. 
In a criminal case, the employer must also have obtained a compensation order issued under section 300 of the Criminal Procedure Act 51 of 1977, ordering the fund to recover damages from the member’s benefit and pay this amount to the employer at the time the employee exits the fund. Such a compensation order is not an automatic outflow of a criminal case. Therefore, despite a judgment in a criminal case, the employer may still not recover its damage from its fund absent a compensation order. The employer’s lawyer must arrange that the prosecutor pursues a compensation order.
Employer is entitled to pension fund deduction after double salary payments 
A complaint by a member against his pension fund's decision to withhold his withdrawal benefit was dismissed and it was found that the employer was entitled to claim a deduction for double salary payments made to the complainant for over two years. It was found that the complainant was dishonest in not bringing the payments to the attention of his employer.
The complainant commenced his employment with Nedbank from 1 February 2017 until 13 September 2019. He was a member of the Old Mutual Superfund Pension Fund (the fund) by virtue of such employment. Prior to being a permanent employee, the complainant had been employed by Nedbank for two consecutive periods on fixed term contracts during the period June 2016 to December 2016. During the period of the fixed term contracts, the complainant  was  remunerated at the rate of R 5OO per hour. Upon becoming a permanent employee , the complainant's remuneration changed to R414 per hour capped at 158 hours per month/R785 644 per annum.
The complainant admitted that he noted discrepancies in his salary after becoming a permanent employee. He said that he initially assumed that this was because of the transition from fixed-term employee to permanent and that these discrepancies would resolve over time. When the discrepancies persisted, he assumed that Nedbank "had in fact not prejudiced him, by reducing his pay scale so drastically". The complainant said that his IRPS documents agreed to his payslips.
After an investigation by Nedbank, it was discovered that the complainant was receiving a second salary as a result of a processing error whereby he was not removed from the temporary payroll. This resulted in the complainant receiving almost double his salary for a period of just over two years. Despite admitting knowledge of the discrepancy, he never brought it to the attention of Nedbank. In a written statement made to Nedbank after the investigation, the complainant admitted his liability to Nedbank and undertook to repay the money. The complainant was subsequently dismissed for misconduct relating to dishonesty and criminal charges were laid against him for fraud. The complainant referred the matter to the CCMA but abandoned the arbitration after conciliation failed.
The complainant tried to access his pension fund after his dismissal and was informed that it was being withheld because of the employer's claim against him and pending the outcome of legal proceedings against him. After failing through his legal representative to get the fund to change its decision, the complainant decided to lodge a complaint with the PFA.
In the determination, it was found that the complainant had admitted his liability in writing to the employer and that the basis for such liability was his misconduct relating to dishonesty, as per the findings of the disciplinary enquiry. The  reason proffered by the complainant for abandoning the CCMA arbitration as being due to a lack of funds for legal representation was rejected and it was held that legal representation at the CCMA for unfair dismissal was not an automatic right. Furthermore, that the CCMA processes were designed to assist lay persons and that if the complainant desired legal representation then he could have approached Legal Aid.
The complainant's argument that he should have been found negligent instead of dishonest was also rejected.
"These payments persisted for a long time and the complainant had sufficient opportunity to query same with the third respondent. He failed to do so. As an employee and in terms of the employment contract entered with the third respondent, the complainant stood in a position of confidence which involved aduty to protect the interests of his employer. Accordingly, the complainant owed a fiduciary duty towards the third respondent which he failed to fulfil ..."
It was held that payments of almost double his expected salary should have raised alarm bells and the complainant ought to have queried same. Instead, he chose to stay silent. He also knew that he did not work for the hours that he was being paid for.
"The inescapable conclusion is that the complainant, who conceded that he became aware of the discrepancies in his salary from the outset of his permanent employment, did not bring it to the attention of the third respondent because it benefited him and because he assumed that the double salary payments would go unnoticed due to the scale of the third respondent's operations."
It was found that there was a duty to speak on the part of the complainant and that his failure to do so constituted dishonesty.
It was held that there is a distinction to be drawn between the 'withholding' of a benefit and the 'deduction' of compensation due to an employer on the grounds of fraud, theft, dishonesty, or misconduct.
In circumstances where there is no dispute that the member admitted liability in writing, and such liability arises from dishonest conduct, a deduction can be made without awaiting the outcome of civil or criminal proceedings. There is simply no point in the fund continuing to withhold the complainant's benefit. The employer was entitled to a deduction and it follows that the complaint could not succeed because it would deprive Nedbank of the relief it is lawfully entitled to.”
Source: The 2020-21 annual report of the Office of the Pension Fund Adjudicator


Snippets for the pension fund industry

Blending solutions for an optimal retirement income

 “…Ensuring a sustainable income that lasts throughout retirement is the main goal when selecting a retirement income solution. 
The retirement conundrum

We start saving too late; we save too little; we spend what we can access when leaving employment; we retire with debt; we don’t review our retirement savings periodically and we don’t get advice from a professional financial planner. 
Added to this conundrum are the risks at retirement: 
  • Sequence risk – withdrawing from your retirement account at a time when the markets are not doing well and that could damage your overall return.
  • Longevity risk – the risk of living too long (and consequently outliving your retirement capital).
  • Investment risk – the risk of negative performance in the markets; and
  • Inflation risk – the risk that your income doesn’t keep up with inflation. 
Multiple eggs, many baskets

Against this backdrop, there are many important, complex financial decisions to make when you retire. There are many options available to provide for your retirement, and there really is no one-size-fits-all solution. Combining solutions could provide the best answer to ensure sustainable retirement income.

However, choosing solutions and combining them for best effect, is tricky and must take into account many factors that are unique to the person for whom the plan is being designed.
  • A living annuity provides flexibility and the potential to leave a capital legacy, but your capital is not guaranteed for life.
  • A life annuity will provide a guaranteed income – that is not impacted by market volatility – for the rest of your life, but without the flexibility of the living annuity and there is no capital available to leave as a legacy.
  • By combining these two income options, you’ll secure a guaranteed income that will withstand market volatility, via the life annuity.  You’ll also gain control over your income (percentage selected) and investments (underlying investment options selected) via the living annuity. 
Speak to your financial adviser about the best solution for your needs.

Here are some tips for people facing retirement, to help ease some of the anxiety you may be feeling…”
Read the article by Linda Blom in FPI Mymoney123 here…
Is now the right time to invest in equities?

 “…During times of extreme market volatility investors often hesitate to increase their equity exposure. They question whether they should purchase more equity or wait until markets stabilise. It is impossible to know what the market will do next, but one thing is clear, equities are looking much more attractive now than they were last year. If you are a long-term investor and you have surplus funds, then you could consider investing a portion of the money into listed equities.
Events such as the one we are currently witnessing can present unique opportunities for long term investors. Decision making though is the key. The opportunity presented by the current market volatility never presents a clear path into which asset (equities, bonds, cash or properties) or which sector (industrial, technology, medical, resources, etc) to focus new investments on. One could for example stagger one’s investments in the markets over a period thereby spreading the market timing risks present in these highly volatile markets.
Short-term investors (often referred to as speculators) are focused on trying to time the markets over the short-term and this substantially increases the risk in employing a short-term investment strategy. These types of investors may miss the long-term investment opportunity that may present itself at these times.
Therefore, in times of volatility, one should focus on one’s long-term investment goals and if you can and you can see the opportunity then consider increasing your invested capital, but this approach may take some time to stabilise and to reflect the benefits…”
Read the article by Michael Haldane in Moneyweb of 10 March 2022 here…
How does stagflation impact investment returns?

 Editors Note: Although the following article is somewhat dated, the Ukraine crisis raised its relevance.

“…However, growth momentum is already showing signs of slowing down as fiscal and monetary stimulus fades. Meanwhile, inflation remains elevated due to supply-chain disruptions and soaring energy costs…
Taken together, concerns are brewing that a stagflationary environment – one of low growth but high inflation – may be unfolding.

Business cycle phases

In general, there are four different phases of the business cycle based on the evolution of output and inflation: goldilocks, disinflation, reflation and stagflation.
So, how should investors prepare for this possible scenario? Our analysis reveals which asset classes are likely to outperform if it comes to pass.

From reflation to stagflation, winners and losers fluctuate

The table below shows the average real (inflation-adjusted) YoY total return of major asset classes since 1973 (see footnote for the full business phase definitions).

Clearly, the best and worst performers vary considerably across each phase and the dispersion of returns within each phase has also been stark…”

Read the article by Sean Markowicz of Schroders in Cover of 21 November 2021 here…

Snippets of general interest

War and your wealth
“…Most of us have not lived through a real war in the past, and we still need to see if this invasion will turn into a full-scale war. It surely is the biggest challenge to Europe since World War 2. There are however several previous occasions from which we can take valuable lessons to apply to the current situation.
‘Buy when there is blood in the streets.’ Literally and figuratively spoken. It is a proven fact that previous geopolitical occurrences have created extremely great buying opportunities for investors. As mentioned, these periods do not often last very long, and you might miss the boat when you are sitting on the side (cash). Morgan Housel wrote in his book: “All past declines look like an opportunity; all future declines look like a risk.” Do not fall victim to this.
It is important to focus on building well-diversified portfolios on a global scale. People will remain consumers of the products and services that companies produce, even when times are tough. This consumption is the revenue driver of the underlying companies, which will lead to profit generation…”
Read the article by Ruan Breed in Moneyweb of of 8 March here…
Game-changing markers for SA socio-economic advancement – Can Namibia learn?

“In his recent State of the Nation Address (SONA) president Ramaphosa laid down a few potentially game-changing markers for socio-economic advancement, including the following:
  • Acknowledging that the private sector is the major contributor to growth, development, and investment; government should therefore create an enabling environment.
  • Government should not be seen, nor act, as a major employer.
  • Self-employment should be a major source of job creation.
  • The intention to reduce red-tape, thereby making it easier to do business in the country.
  • Initiatives aimed at security a reliable supply of electricity (including renewable energy sources)…” 
Read the article by Staffwriter in Businesstech of 21 February 2022 here...
Editor’s note: I agree that this is also the way to go for Namibia, but - is Namibia prepared to follow SA’s lead? Preferably, Namibia should take the lead with such policies to make us more competitive against SA.
An early inheritance: Considerations and options 

“Many parents toy with the idea of gifting their children some of their inheritance while they are still alive, especially in tough economic times where many young adults are battling the make ends meet or could benefit from some financial assistance as a means to getting ahead.
However, giving away some of your wealth while you are still alive is something that should be undertaken with the utmost caution. In this article, we unpack a number of factors that should be considered before parting with your wealth, together with options for effecting an early inheritance.

What to consider before giving your child an early inheritance
  1. Family dynamics - Family dynamics and relationships are typically complex and have a tendency to change throughout one’s lifetime – and you need to be sure that any decision you make today regarding your children’s early inheritance can stand the test of time.
  2. Equal vs equitable - An equal apportionment means dividing the assets into matching amounts amongst one’s children. On the other hand, an equitable apportionment is designed to achieve a proportionately fair inheritance for each child.
  3. Inheritance is multi-generational - Whatever you choose to bequeath to your children does not stop there, but rather flows to the next generation and the next – although how this happens may not always be under your control.
  4. Reasons for an early inheritance - Do your children need financial support to cover their living expenses? Do they need help purchasing their first home? Do you have a special needs child that needs to be supported financially?
  5. Your retirement plan - Whatever is driving your desire to give your children an early inheritance, do not lose sight of the fact that your retirement plan remains your first priority and it goes without saying that you need to have a robust, stress-tested retirement plan in place before you can even contemplate giving away any of your wealth.
  6. Different value systems - While one child may be delighted to inherit a half-share of the family holiday home, your other child who lives abroad may find no value in owning a share in the property.
  7. Open communication is essential - Ideally, avoid surprises by ensuring that your children are kept abreast of the plans and discussions, and do everything possible to ensure that no resentment or anger arise.
  8. Options for giving children an inheritance
    • Donations
    • Loan agreement
    • Living trust…” 
Read the article by Gareth Collier of Crue Investments in Moneyweb of 24 Febraury 2022 here…

And finally...

Great quotes have an incredible ability
to put things in perspective.

"Never look down on anybody unless you’re helping them up.”
~ Jesse Jackson


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Whilst we have taken all reasonable measures to ensure that the results reflected herein are correct, Benchmark Retirement Fund and RFS Namibia (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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