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

Benchtest 09.2022, RFS logo and name change unveiled, RA’s vs retirement funds, and more...

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Important notes & reminders

  NAMFISA levies
  • Funds with September 2022 year-ends must submit their 2nd levy returns and payments by 25 October 2022;
  • Funds with March 2023 year-ends must submit their 1st levy returns and payments by 25 October 2022; and
  • Funds with October 2021 year-ends must submit their final levy returns and payments by 31 October 2022..
FIMA implementation imminent

According to the NAMFISA CEO the implementation of the FIMA is imminent.

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 2022, 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
  • Annemarie Nel (tel 061-446 073)
  • Kristof Lerch (tel 061-446 042)
  • Christina Linge (061-446 6075)
Toolbox for trustees

RFS provides comprehensive support for trustees. Find a list of download documents to assist with governance and management of private funds, registered as of June 2022, here...



In this newsletter, we address the following topics:
  In 'A note from the MD', Marthinuz Fabianus announces the RFS name change and new logo

In 'Tilman Friedrich's industry forum' we present...
  • Monthly review of portfolio performance – 30 September 2022
  • Retirement annuities and termination penalties
  • Retirement fund or retirement annuity – a choice for employers? 
In 'News from RFS' read about...
  • RFS announces name change and rebranding
  • Long service awards
  • Saying goodbye is never easy!
  • Retired but still active!
In 'News from NAMFISA' read about...
  • NAMFISA Conference – FIMA update
In 'Legal snippets,' read about...
  • Fund must hear the member before withholding
  In 'Snippets for the pension funds industry,' read about...
  • Five tips to save for retirement
  • Is now a good time to invest?
In ‘Snippets of general interest', read about...
  • Critical habits of mentally tough people
  • 10 Habits of ultra-likeable people
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
Marthinuz Fabianus
A note from the Managing Director

RFS unveils change of company name and logo
For 22 years, we traded under the name Retirement Fund Solutions (better known as RFS), but we were obligated to change our name, and the new name RFS Fund Administrators was approved earlier this year. We celebrated the slight change to our name  and logo with our clients and stakeholders on 29 September 2022.

Businesses that succeed are those that adapt to live through time and change. RFS is such a business. Since the formation of RFS, the retirement funds industry has been characterised by many changes.

1. Did you know, that:
  • RFS established the Benchmark Retirement Fund in January 2000.
  • NAMFISA as pension funds’ regulator was established out of a directorate in the Ministry of Finance during RFS’s time.
  • Since RFS's formation, three of the major insurance companies in Namibia gave up the administration of stand-alone pension funds.
  • The GIPF, as we know it today, was established after RFS formation.
  • There have been some new entrants into the market, consolidations, takeovers, and mergers during the life of RFS.
  • Pension fund structures have undergone substantial changes over the past 23 years:
  • Since RFS was established, we saw the increasing demand for member-choice investment portfolios by pension funds, which substantially increased the complexity of pension fund administration.
  • The increased regulatory reporting, requirements, and oversight over the past ten years have been unprecedented.
  • More recently, the move to umbrella fund arrangements, to mention some
You may now ask, what recipe helped RFS to be the change-defying Namibian success story it has been to date? The answer to that lies in our clearly articulated business philosophy and values:

2. Our values
  • We strive to be autonomous - We have put local needs first. We are not oblivious to the benefits a large international associate can bring, but we have chosen to be an owner-managed business.
  • Integrity – We do business and deal with our clients honestly and transparently. Our time-tracking system maintains the principle of “treating customers fairly” by avoiding cross-subsidisation amongst clients.
  • We work for the stability of our company and build long-term relationships with stakeholders. Our core management team has been intact since the company's formation, with only one resignation.
  • Empowerment of our staff has been the cornerstone of our staff retention. This year we attained a 95% BBEE rating from NPPC.
  • We prefer long-term growth over short-term profits.
  • We focus on what we do best – i.e., pension fund administration and management.
3. Our recipe to success – being GREAT! 
  • Governance – We currently employ six chartered accountants, the best-suited qualification for retirement fund management.
  • Rigid quality standards – Clients who prefer to run their funds' affairs with little regard to their own rules and the pension fund laws may sometimes find our strict compliance focus frustrating – in the best interests of trustees and fund members. 
  • Excellence of our staff is derived from our ownership notion. 
  • Added value is applying senior management’s skills to every client, small or large. 
  • Track record– I am happy to note that RFS has not lost a client to date due to poor service provision. I pause to point out that RFS has greatly benefited from Namibian business solidarity.   
Thank you to all our valued clients; you have helped us cement our place as the No 1 address in employee benefits administration.
Tilman Friedrich's industry forum
Monthly Review of Portfolio Performance
to 30 September 2022

In September 2022, the average prudential balanced portfolio returned -2.3% (August 2022: 0.0%). The top performer is Allan Gray Balanced Fund with -0.9%, while NAM Coronation Balanced Plus Fund with -4.3% takes the bottom spot. For the 3-months Hangala Prescient Absolute Balanced Fund takes the top spot, outperforming the 'average' by roughly 1.5%. Momentum Namibia Growth Fund underperformed the 'average' by 1.6% 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 30 September 2022 provides a full review of portfolio performances and other insightful analyses.  Download it here...
The Benchmark Default portfolio – ideal for the average pension fund member!
A well-known investment adviser once remarked, "in a hurricane, even turkeys can fly"! He was talking about investment managers' performance. Since the Covid crisis struck share markets in March 2020, they experienced a hurricane worldwide until the end of 2021. The S&P 500 grew 42%, and the SA Allshare 33% (annualised)! Over this period, the average prudential balanced portfolio produced a return of 21.5%, and the Default portfolio 19.9% (annualized). Table 6.1 reflects the prudential balanced portfolios' point-in-time returns over various periods until December 2021. Over each but one period, the Default portfolio produced worse returns than the average portfolio! Many Default portfolio investors were disappointed and dissatisfied with its performance; one can understand why.

Table 6.1
Period SA ALSI % Best % p.a. Worst % p.a. Average % p.a. Default % p.a
1 month 4.6 3.3 2.2 2.7 2.4
3 months 14.7 8.2 5.0 6.8 4.9
6 months 11.3 12.5 7.3 9.6 8.0
YTD 24.1 21.8 13.2 18.1 14.6
1 year 24.1 21.8 13.2 18.1 14.6
3 years 11.8 14.9 8.0 11.3 9.5
5 years 7.8 10.6 8.0 9.4 8.1
10 years 8.7 12.3 11.3 11.2 11.0
15 years 7.5 11.5 10.1 10.2 10.4
20 years 10.3 14.5 12.2 12.5 10.8

The Monthly Review of Portfolio Performance to 30 September 2022 also reflects the editor’s views on current developments and their impact on investment markets. Download it here...
Retirement annuities and termination penalties
The market offers two different retirement annuity products. One is sold as an insurance policy. The other product is an investment-linked product where the participant becomes a member of a retirement annuity fund, similar to membership of a pension- or provident fund, except that the member participates in his personal capacity rather than as a member of a group of employees linked to an employer. A critical difference between a retirement annuity and a pension- or provident fund is that the former is a sales-driven retail product. In contrast, the latter is a compulsory institutional product. Retail products pay commissions to drive sales, which is not necessary for institutional products.
The ‘traditional’ retirement annuity product pays a large up-front commission to the broker that consumes nearly all premiums paid in the first year and a substantial portion of the premiums paid in the second year. The insurance company maintains two accounts for each retirement annuity member. The investment account comprises the premiums paid minus administration fees, plus investment returns. The second account is a loan account by the insurance company to the member, comprising of the up-front commissions paid plus investment returns due to the insurance company on the commissions paid to the broker. The insurance company would lose the balance on the loan account when the member dies or reaches retirement. Of course, someone other than the insurance company would have to pay for the forfeited loan. The insurance company builds that ‘loss’ into the product's cost structure. When a member terminates the policy before its contractual end date, the loan would realise through the insurance company offsetting it against the member’s investment account balance. The write-off is termed an early termination penalty. Unfortunately for the member, there are often valid reasons for terminating his contributions, such as dismissal, redundancy, change of job with compulsory membership of the new employer’s pension fund, and others that reduce his disposable income.
Because the early termination penalty was difficult to swallow for members and is nowadays frowned upon by the courts and regulators, insurance companies have launched a new insurance policy product. This product offers a bonus to encourage the member not to terminate contributions early instead of the former penalty discouraging the member from stopping his contributions. It is and will still be seen as a penalty, even if it is now sold as the member forfeiting the prospective bonus. The member will have paid for the bonus he lost, while the other member who reaches the end of his contracted term receives a bonus partially paid for by the first member. Of course, the insurance company cannot generate the bonus from thin air. It is built into the cost structure, and where one person loses, another person gains – indeed, the insurance company does not stand in for the loss.
Retirement fund or retirement annuity – a choice for employers?

Under the Pension Funds Act (PFA), a retirement annuity fund is a pension fund. The PFA does not distinguish between different types of funds and applies to all fund types, i.e., pension funds, provident funds, retirement annuity funds, and preservation funds. The distinction derives from the Income Tax Act (ITA). Note that the ITA does not know a retirement fund. Depending on the fund's rules, it is either a pension fund or a provident fund. The ITA accepts that the retirement annuity and the preservation fund are individual arrangements and that the pension and provident funds are employer-sponsored group arrangements.
Before we look at a membership life cycle in a group fund versus a retail fund, it is relevant that the market offers two retirement annuity products: an insurance policy contract and an investment-linked retirement annuity.

The insurance policy can provide death and disability benefits plus a retirement benefit. The insurance company deducts its administration fee and pays a regulated commission to the intermediary. These costs typically consume the premium for the first two years, and the insurance company would not pay out anything if the policy is cancelled within the first two years. Employees often find that they cannot afford to maintain the retirement annuity policy when their employer obliges them to participate in its pension fund. Where the former employer required members to arrange their personal retirement annuity policy, and the employee moves to another employer with a pension fund arrangement within a few years, the employee may lose all premiums paid into the retirement annuity policy if it is cancelled. This product offers limited or no investment choice.
The investment-linked retirement annuity only provides for retirement savings. The product provider deducts its administration fees and pays a commission to the intermediary on the contributions paid and the accumulated capital, as agreed between the intermediary and the employee. The commission is a percentage of the contributions and the accumulated capital. The net premium after these costs accumulates with net investment returns. The employee can suspend or terminate his contributions at any time without affecting the value of his retirement savings. This product usually offers a wide range of investment options.
The membership life cycle
  1. Setting up an arrangement for employees
    • Retirement fund
      • The employer initiates the establishment of the fund. It sets the employer and employee contribution rates, the death, and disability benefits, the investment options, and the service providers. The employee’s membership is compulsory, and all employees will have the same arrangement as decided by the employer. The employer may change the fund’s benefit and contribution structure to adapt to a changing environment and needs at any time. The employer must establish systems and procedures to administer payroll deductions.
    • Retirement annuity
      • The employer is not involved except for allowing the intermediary access to the employees and setting up systems and procedures for administering the employees’ payroll deductions.
  2. Operating the arrangement for employees
    • Retirement fund
      • If interested, an employer might be able to participate in the fund’s management. The employer will be heard in its management as it operates for the benefit of employers and their employees. The employer can usually also choose the service providers and change his choice yearly. For larger employers, the insurance premiums are linked to their claims experience.
    • Retirement annuity
      • The product is designed for individuals, and the employer has no influence. The employer cannot enforce minimum benefits to overrule short-sighted employees’ short-term objectives. Insurance premiums are standard for all lives the insurer covers.
  3. Operating costs
    • Retirement fund
      • A retirement fund is designed to focus on group needs. Costs and benefits are determined for the group, not the individual. Employees are not required to prove their health individually, and the processes are more efficient. Retirement funds do not pay up-front sales commission but only an ongoing service fee that is effort related. The investment management fee for a group is typically 0.75% of investment value lower than for a ‘retail structure’ (retirement annuity). As a result, retirement funds are more cost-effective. Employers can influence their costs in determining benefits, contributions, and service providers.
    • Retirement annuity
      • A retirement annuity is designed to focus on individual needs. The individual determines benefits, and the cost results from his requirements. Employees are required to prove their health individually. A retirement annuity insurance product pays a substantial up-front sales commission and an ongoing commission unrelated to input. The regime applicable to investment-linked retirement annuities is closer to the retirement fund, but costs are determined per individual and are only indirectly effort-related. The investment management fee for a ‘retail structure’ (retirement annuity) is typically 0.75%+ of investment value higher than for a group (retirement fund).
  4. The employer contributions
    • Retirement fund
      • The employer contributions must be paid to the fund monthly. The contributions are tax deductible at the percentage approved by NamRA and will adjust automatically with any salary adjustment.
    • Retirement annuity
      • The employer must deduct and pay the monthly employee contributions to the product provider. The employer cannot make contributions.
  5. The employee contributions
    • Retirement fund
      • The employer administers the employee’s contributions. The contributions will adjust automatically with any salary adjustment. They are tax deductible up to N$ 40,000 annually (due to an increase to N$ 150,000).
    • Retirement annuity
      • The employer administers the employee’s contributions. The contributions will not be affected by any salary adjustment. They are tax deductible up to N$ 40,000 annually (due to an increase to N$ 150,000).
  6. Arranging membership for the employee
    • Retirement fund
      • The employer must complete a form for each new employee and submit it to the retirement fund. The employer must administer any choices the fund offers its employees during every year. Employees automatically enjoy death, disability, and retirement benefits without further requirements.
    • Retirement annuity
      • The intermediary must assist each new employee with completing his application form, likely during working hours if the employer administers the payroll deductions. The employee may have to undergo medical tests during working hours.
  7. Resignation of the employee
    • Retirement fund
      • The employer must complete a form for the employee and submit it to the retirement fund. The employee will receive a taxable cash benefit but can also preserve tax-free.
    • Retirement annuity
      • The employee remains a retirement annuity fund member without employer involvement. The employee will not receive a benefit and must make alternative arrangements for future monthly contribution payments. He may be obliged to join his new employer’s retirement fund and contribute. If the new employer’s retirement fund provides death and disability benefits, the employee might be over-insured through death and disability benefits of the retirement annuity. If he stops contributing to the retirement annuity, its death and disability benefits will expire. An insurance policy retirement annuity levies a penalty should the employee suspend his contribution. The latest insurance policy products in the market do not levy a penalty, but the employee would forfeit a prospective bonus. The employee will perceive it as a penalty. The investment-linked retirement annuity product allows for suspending contributions without any penalty or bonus for sustaining his contributions.
  8. Death of the employee
    • Retirement fund
      • The trustees of the retirement fund, guided by the employer, will distribute the benefit in consideration and the best interests of the deceased employee and his dependants. The benefit is based on the employee’s salary at the date of death. The benefit may comprise tax-free cash lump sums and taxable annuities (pension fund) or only cash lump sums, one-third tax-free (provident fund).
    • Retirement annuity
      • The trustees of the retirement fund will distribute the benefit in consideration and the best interests of the deceased employee and his dependants. Unless the employee arranged for life insurance cover, the benefit, comprising only of his retirement savings, might be minute should the employee pass away within the first few years after entering into the retirement annuity contract. The benefit comprises taxable annuities, of which one-third can be commuted to a  tax-free lump sum.
  9. Disability of the employee
    • Retirement fund
      • The employee will receive a taxable monthly income, typically 75% of his last salary, until he recovers, passes away, or must retire. He would remain a fund member and would have life insurance cover. Contributions would continue as before.
    • Retirement annuity
      • Unless the employee arranged disability insurance cover, he would receive an annuity for life from his accumulated retirement savings, of which one-third is tax-free. In the case of a young employee, the pension could be minute.
  10. Retirement of the employee
    • Retirement fund
      • The employee must retire at the age the fund rules state. The benefit may comprise a taxable annuity of which one-third may be commuted for a lump sum (pension fund) or only a cash lump sum, one-third tax-free (provident fund).
    • Retirement annuity
      • The employee must retire between 55 and 70. The benefit may comprise a taxable annuity of which one-third may be commuted to a lump sum (pension fund).
  11. Transferring to another fund
    • Retirement fund
      • When an employee moves to another employer, he can transfer his retirement savings in the previous fund tax-free to the new employer’s fund or transfer it to a preservation fund. If he moves to a preservation fund, he can later add to it from another employer’s fund and withdraw any portion of the capital within three years of having transferred. He can decide shortly before retirement if he wants all money in cash, one-third tax-free (provident preservation fund), or, if he prefers, a taxed annuity of which he can commute one-third to a tax-free lump sum.
    • Retirement annuity
      • Money in an insurance policy cannot be transferred to another retirement annuity until retirement. Money in an investment-linked retirement annuity can be transferred to another retirement annuity but not to any pension or preservation fund.
  12. Investment and benefit options
    • Retirement fund
      • Unless the employer chooses the investment portfolio/s, the employee can usually choose from a wide range of third-party portfolios, pre-approved and vetted by the trustees. Often, employees can choose between different death and disability benefits and contribution rates and may change their choice annually.
    • Retirement annuity
      • In an insurance policy, the employee has no choice or a choice between two or three standard portfolios of the insurance company. In an investment-linked product, he can usually choose from a wide range of portfolios, often also from third parties. Once the employee has signed a contract for death and disability benefits, the contract cannot be changed, no matter the employee’s salary.
  13. Housing loans
    • Retirement fund
      • Retirement funds usually offer a housing loan facility.
    • Retirement annuity
      • Retirement annuities do not offer housing loans.
  14.  Product transparency
    • Retirement fund
      • The fund typically accounts to the employer in detail.
    • Retirement annuity
      • The insurance product is very intransparent and offers no accounting. The investment-linked product is very transparent, with detailed accounting to the member.

Retirement annuities are not designed for groups, large enough to establish a pension fund. They have many disadvantages over a pension fund from employees’ and employers’ perspectives and are not a credible alternative to a retirement fund. Employees will likely experience disappointment in the future when they are paid a benefit. This negative experience will discredit the arrangement and the employer.
Usually, the biggest beneficiary of such contracts is the broker, who earns a substantial commission on each contract. Insurance companies offering products have a fiduciary obligation towards their clients to ensure that their sales force does not mis-sell their products for purposes they are not designed for because of the product’s built-in sales incentives
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.

Compliment from an auditor
Dated 24 August 2022
  “We would like to express our profound gratitude and sincere thanks to the Fund Administrator and Fund Accountant in the persons of … and … respectively.
The gentlemen adequately prepared for the audit, being proactive in their delivery of the supporting documentation we would ordinarily need to carry out our audit work. All such schedules and documentation were filed timeously and meticulously.

This further demonstrates the calibre of their personalities and the effort, time and excellence they put into their work. This is what has necessitated us to make special mention of their excellent work.

We are aware that … and … work with a team. At this point, we would like to extend our appreciation to each team member for their contribution, time, talent and effort. Thank you for the excellent filing and documentation of paperwork. All of this has made the audit pleasurable and enabled us to reach the audit deadline.

Thank you for maintaining an open-door policy of open communication. It was very refreshing to work with … and … who not only are knowledgeable in their vocations but were willing and patient to clarify the plethora of queries we had.

To the management, we revere you for setting a conducive work environment that enables employees to live out their purpose with excellence, dedication and passion. This has reflected in the way all employees have carried out their work.

Read more comments from our clients here...
News from RFS
RFS announces name change and rebranding
RFS officially announced its name change from Retirement Fund Solutions Namibia (Pty) Ltd to RFS Fund Administrators (Pty) Ltd during a function for clients in a stunning setting at Droombos on 29 September 2022. At the same time, RFS presented the rebranding of the company and the Benchmark Retirement Fund.
The following photos convey an impression of an enjoyable and relaxing atmosphere.
  A stunning setting under the Camelthorn
  JR Cupido – winner Voice of Namibia 2022
  Guest watching our MD’s presentation
  A fresh new look – the new RFS logo
  A fresh new look – the new Benchmark logo
  Namwater trustees Timothy Silombela and Simeon Kamati with RFS’ Rauha Hangalo
  RFS’ Tilman Friedrich and NAMFISA trustees Charlene Potgieter, Allen Hatzenberg with Harry Kharigub (Bank Windhoek)   Benchmark trustee Sabrina Jacobs and RFS’ Marthinuz Fabianus  
Long service awards
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, our clients lose corporate memory whenever the administrator loses a staff member. 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 and IT systems that are more flexible, versatile, adaptable, and appropriate for the Namibian environment. We are proud of our staff retention record which is the key to our success!

The following staff member celebrated her work anniversary at RFS! We express our sincere gratitude for her loyalty and support to
  • Karin Douglas, 1 November: 5 years
We look forward to her continued dedication and commitment to the company, its clients and colleagues!
Saying goodbye is never easy!
RFS regrets to advise that Milton Mentile and Erica Hipondoka will be leaving our employ at the end of October to pursue other interests. Both Joined us in 2014. While we are sad to see such dedicated people going, we wish them only the best for the future and hope their dreams will come true!
Retired but still active!
The first three employees who reached their normal retirement age arranged with RFS to continue contributing their extensive knowledge and experience to the company, their colleagues, and their clients. In the picture from left to right: Charlotte Drayer, Tilman Friedrich, and Anna Willemse.
Important circulars issued by RFS
RFS did not issue any circular since the previous newsletter. Clients are welcome to contact us if they require a copy of any circular.

The following photos convey an impression of an enjoyable and relaxing atmosphere.
News from NAMFISA

NAMFISA Conference – FIMA Update
During the conference held at Swakopmund on 12 and 13 October, Mr Matomola had the following to say about the way forward:
  • FIMA will come into operation very soon. The delay had nothing to do with the controversy over the compulsory preservation regulation. Instead, the delay resulted from the scrapping of the Financial Adjudicator Act. All references to this Act in the FIM Act and the NAMFISA Act needed to be removed.
  • Feedback on comments on FIMA subordinate legislation will be provided during October/ November 2022 – this will be uploaded on the NAMFISA website. On some standards, significant changes were made due to the comments received. As a result, some standards will be re-gazetted.
Legal snippets
Fund must hear the member before withholding 

A complaint lodged with the PFA was upheld when it was found that the fund decided to withhold the complainant’s benefit without first affording the member an opportunity to be heard. The complainant was employed from 9 January 2012 until 28 January 2019. He was a member of the fund by virtue of his employment. Upon the termination of his employment, a withdrawal benefit accrued to the complainant who became entitled to a withdrawal benefit. According to a benefit statement issued to the complainant, he had a fund credit of R897 994.34 as at 31 January 2019. Upon claiming the benefit, he was informed that it could not be paid to him as there was a criminal case against him which needed to be finalised.

The complainant was dissatisfied with the fund’s decision to withhold his withdrawal benefit and lodged a complaint with the PFA. The administrator of the fund submitted that the complainant was employed until 31 January 2019 and potentially became entitled to a benefit from the fund. His fund credit as at 31 January 2019 amounted to R897 994.34 before tax. It stated that the employer requested the withholding of the benefit pending finalisation of legal proceedings against the complainant.
The administrator stated that in deciding whether to withhold the benefit, the first respondent considered that criminal proceedings have been instituted by the employer against the complainant relating to fraud and the amount claimed and damages suffered by the employer amounts to approximately R1 000 000 which exceeds the complainant’s benefit in the first respondent. The administrator stated that the claim by the employer falls within the ambit of section 37D(1)(b)(ii) of the Act. It contended that the withholding is lawful.

The PFA held that it is permissible for a fund to withhold a benefit in terms of section 37D of the Act. However, certain requirements needed to be met, including that the fund must act with care and in the process balance the competing interests with due regard to the strength of the employer’s claim. The PFA further held that before a fund can exercise its discretion to withhold, it must put the employer’s case to the member and afford the member an opportunity to respond. The board of the fund must apply its mind appropriately and in a balanced manner. The mere satisfaction by the trustees of a fund that the employer has placed allegations before them which, if true, would show damages arising from dishonest conduct by the employee, would not on its own be sufficient.
The duties placed on a board of a fund in section 7C of the Act envisages careful scrutiny of claims made against benefits by employers, and a weighing of the competing interests of the parties after affording the member an opportunity to place his case properly before the fund. The failure by the board to comply with its duties constitutes an inability by the board of the fund to comply with their legally prescribed fiduciary duties.
It was held that the administrator’s legal department, which took the decision to withhold on behalf of the fund, acted at the behest of the employer in deciding to withhold the complainant’s benefit. It acted only on the weight of the submissions made to it by the employer and merely rubber-stamped the employer’s request. It did not put the employer’s case to the complainant nor did it afford the complainant an opportunity to place the complainant’s case properly before it. Pursuant to this failure, the administrator’s legal department acting on behalf of the fund did not and could not apply their minds appropriately, impartially and in a balanced manner. It was further incapable of balancing the competing interests of the parties before arriving at its decision to withhold. As a result, it exercised its discretion improperly.

The fund was ordered to pay the complainant’s withdrawal benefit together with interest.
Reported in the SA Adjudicator’s annual report 2020 – 2021

Snippets for the pension fund industry
Five tips to save for retirement

 To help minimise the risk of insufficient savings in retirement, save 15% of your salary, compound interest will do the rest. Here are five tips from a seasoned actuary:
  1. Start saving as soon as possible – even if you can only make small contributions, and gradually increase what you save each year.
  2. Adjust the amounts you save annually in line with inflation.
  3. Keep a record of all the money you spend and compare this to your monthly budget – several apps can help you keep track.
  4. Don’t try and ‘keep up with the Joneses’
  5. Always preserve your retirement savings when you change jobs 
The table below illustrates the exponential gain achieved the sooner you start saving. It assumes returns are compounded at 8% per annum.
Amount saved per month (R) Number of years Total savings (R) Total savings + interest (R) Amount gained in interest (R) Total accumulated as a percentage of total saving
1,000 5 60,000 72,945 12,945 122%
1,000 10 120,000 180,124 60,124 150%
1,000 15 180,000 337,606 157,606 188%
Read the article by Malcolm Libera in Businesstech of 9 October 2022, here...
Is now a good time to invest?

“Most headlines these days all talk about elevated market volatility, historic records of inflation, a declining global economy, and a potential global recession… No one can predict how the market will behave in the near future and, the uncertainty can make it even more difficult to invest right now. Is it advisable to invest right now or should you wait? This is determined by a number of factors.

Regardless of the direction the market is taking, it is generally a smart idea to keep investing. Even while it may seem illogical to continue investing money when it immediately loses value during times of market volatility, doing so will result in higher gains over the long term thanks to the effects of compounding returns. Buying equity solely when the markets are doing well will result in you constantly paying more without regard for whether the stock is overvalued or not. This can build up over many years, and result in a much higher average price paid for the stock than if you had also made investments during market downturns.

If you still hold your investments, bear in mind that regardless of how much stock prices decline, you don’t really lose money unless you realise the losses (i.e. sell the investment)….Historic data, although not a guarantee of future returns may be used as a guide in determining whether a fund has a proven track record of weathering the bad times and bouncing back. At the end of the day, holding back from investing instead of taking advantage of the underperforming markets may lead to regret when markets eventually recover, in economics we call it opportunity cost.

Keep in mind that when you keep your money un-invested you are not really “saving” but allowing it to be eaten away by inflation. So, what you should be asking yourself is “what is the opportunity cost of holding back from investing when markets are volatile?”

Read the article by Michal Haldane in Moneyweb of 7 October 2022, here...


Snippets of general interest

Critical habits of mentally tough people
“We all reach critical points in our lives where our mental toughness is tested. It might be a toxic friend or colleague, a dead-end job, or a struggling relationship. Whatever the challenge, you have to be strong, see things through a new lens, and take decisive action if you want to move through it successfully. It sounds easy. We all want good friends, good jobs, and good relationships. But it isn’t.”
  • They are emotionally intelligent;
  • They are confident;
  • The neutralize toxic people;
  • They embrace change;
  • They say no;
  • They know that fear is the #1 source of regret;
  • They embrace failure…;
  • yet they don’t dwell on mistakes;
  • They won’t let anyone limit their joy;
  • …and they don’t limit the joy of others;
  • They exercise;
  • They get enough sleep;
  • They limit their caffeine intake;
  • They don’t wait for an apology to forgive;
  • They are relentlessly positive. 
Read the full article by Dr Travis Bradberry on Linkedin, here...
10 Habits of ultra-likeable people

Becoming a more likeable leader is completely under your control, and it’s a matter of emotional intelligence (EQ). Unlike innate, fixed characteristics, such as your intelligence (IQ), EQ is a flexible skill that you can improve with effort.

What follows are 10 key behaviours that emotionally intelligent leaders engage in that make them so likeable.
  1. They form personal connections – they communicate on a very personal and emotional level;
  2. They’re are approachable – they believe everyone is worth their time and attention;
  3. They’re humble – they don’t think they are better than you;
  4. They’re positive – they always maintain a positive outlook and this shows how they describe things;
  5. They’re even-kneeled – they don’t toot their own horns nor do they get rattled when they blow it;
  6. They’re generous – they are confident enough to never worry that your success might make them look bad;
  7. They demonstrate integrity – they inspire trust and admiration through their actions, not just their words;
  8. They read people like a book – they note facial expression, body language and tone;
  9. They appreciate potential – they don’t only see the best in their people, but they make sure that everyone else sees it too;
  10. They have substance – they understand that their knowledge and expertise are critical to the success of everyone who follows them. 
Read the article by Dr Travis Bradberry, from Linkedin, here…

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

"To live is to suffer, to survive is to find some meaning in the suffering." ~ Friedrich Nietsche


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