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

Benchtest 10.2022 – NAC findings on administrators, tax directives on death benefits and more...

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Important notes & reminders

  NAMFISA levies
  • Funds with October 2022 year-ends must submit their 2nd levy returns and payments by 25 November 2022;
  • Funds with April 2023 year-ends must submit their 1st levy returns and payments by 25 November 2022; and
  • Funds with November 2021 year-ends must submit their final levy returns and payments by 30 November 2022..
ITA amendments

Parliament is deliberating an increase in the tax deductibility of contributions to education policies and retirement funds to N$ 150,000.

Repo rate up by another 0.75%

Bank of Namibia announced an increase in the repo rate from 5.5% to 6.25% on 27 October. Accordingly the interest on direct fund housing loans will increase to 10.25% from 1 November.

Administration of Estates Act being amended

The amendment of the Administration of Estates Act was read a third time in the National Assembly without any changes on 16 November, and was approved. It will now be sent to the National Council for approval.
  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 dispels media reports on the NAC findings

In 'Tilman Friedrich's industry forum' we present...
  • Monthly review of portfolio performance – 31 October 2022
  • Investment markets have not normalised yet!
  • Death benefits from a pension fund – are tax directives required?
  • The legislative reform conference 2022 – a comment
  • Should you allow a disabled member to go on early ill-health retirement?
  • Can your employees deduct voluntary contributions to the fund? 
In Compliments, read...
  • A wonderful testimonial from a consultant
In 'News from RFS', read about
  • Saying goodbye is never easy
  • RFS welcomes new staff member
  • Economist Businesswomen Club breakfast
In 'Benchmark: a note from Gunter Pfeifer', read about...
  • The Annual member meeting: 17 November
  • Annual member meeting: member feedback
  • Benchmark: The umbrella fund of choice – its service levels
In 'News from NAMFISA', read about...
  • The legislative reform conference 2022
  • The upcoming pension fund industry meeting
  In 'Legal snippets,' read about...
  • Payment of pension benefits into jointly held accounts
  • Admissibility of affidavits as evidence in death benefit claims
  • Fund must ensure employer pays member’s contributions
In 'Snippets for the pension funds industry,' read about...
  • South Africa’s top fund managers’ stock picks in October
  • This one mistake can cost you big at retirement
In ‘Snippets of general interest', read about...
  • SA schools’ tactics to get parents to pay up
  • The 15 best universities in South Africa for science, technology and engineering
  • The first step in becoming a great leader
  • Leaders that truly are catalysts need to be humble
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

Dispelling media reports on the NAC findings
The NACC investigated “alleged abuse of administrators of their dominant position by tying and bundling distinct and separate products using exclusive service level agreements with their clients, in particular the umbrella funds”.
The Commission informed RFS that their investigation did not find RFS and others to have contravened the relevant section of the Competition Act as alleged and thus absolved RFS.

To provide appropriate context, here’s a summary of industry aggregate fund administration:

Statistics as at July 2018 (when the investigation was underway)

As can clearly be seen from above statistics, five administrators serving the private funds industry, were accused of anti-competitive practices, although these five represented 38% of the overall membership of the pension fund market and only 24% of the overall pension fund assets. It is interesting that these five players, representing a mere 38% of the total market, should be accused of being monopolistic?

In SA, some 170 registered pension fund administrators administer 98 000 members on average. In contrast, Namibian pension fund administrators on average must survive on an average of 25 000 members which makes some operators not economically viable.

One must conclude that the economic theory that best describes the Namibian market is a “perfectly competitive” market. The most contestable findings by NACC however are:
  1. a market structure in which a small number of firms have a large majority of the market share;
  2. administrators have the power to increase administrative costs beyond reasonable levels;
  3. no possibility for market expansion due to exclusivity and cross selling strategy;
  4. the administrators and associated pension funds operate with the same common purpose, as a single economic unit, being vertically integrated with one another (oligopolistic).
I have already dispelled the first statement with reference to the table above. It is factually not correct. On the second and third statement it was shown over the years that our pension funds’ market is too small to carry more than three administrators. Whenever more than three were active one or more closed doors for not being economically viable. While competition in the market will ensure that no single competitor can charge significantly higher costs than the others, too many players competing for unviable shares of the market will lead to all having to increase their costs beyond reasonable levels to survive.

With the last statement the NACC is generalising. While it may apply to some administrators, it does not apply to all. Per Google search, “vertical integration” is a business strategy in which a company controls multiple stages of its production process and supply chain. RFS, is the administrator of both private/stand-alone employer pension fund arrangements and founder of an umbrella fund, the Benchmark Retirement Fund. All our funds make use of different and unrelated non-administration service providers, such as actuaries, consultants, insurers, auditors, and investment managers. RFS thus only performs fund administration services and nothing else. The FIMA will also now require fund administrators to be registered and regulated by NAMFISA as pre-empted by NACC.

We have jealously guarded our independence and believe this is what helped RFS to be one of the few viable fund administrators, with at least 25 000 members under our administration.

Editor’s note: the article was shortened slightly. It is available in full length here…
Tilman Friedrich's industry forum
Monthly Review of Portfolio Performance
to 31 October 2022

In October 2022, the average prudential balanced portfolio returned 4.4% (September 2022: -2.3%). The top performer is NAM Coronation Balanced Plus Fund with 5.7%, while Hangala Prescient Absolute Balanced Fund with 2.3% takes the bottom spot. For the 3-months Allan Gray Balanced Fund takes the top spot, outperforming the 'average' by roughly 2.1%. Stanlib Managed Fund underperformed the 'average' by 1.8% 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 October 2022 provides a full review of portfolio performances and other insightful analyses.  Download it here...
Investment markets have not normalised yet!
Since the global financial crisis in 2008, the US Federal Reserve has expanded its balance sheet from US$ 1 trillion to US$ 9 trillion by March 2022. Since then, it started its quantitative tightening and intends to runoff its balance sheet by between US$ 2.2 and US$ 3 trillion over the next three years and by selling off treasuries and mortgage-backed securities of up to US$ 95 billion per month
Graph 6.1 – Fed balance sheet
While the Fed expanded its balance sheet 9-fold since 2008, it dropped its policy rate from 5.25% to 0.25%. As of March 2022, it started to raise the policy rate to 4%. The real Fed rate, net of inflation, was an average of 1.8% over 20 years until November 2007, the onset of the global financial crisis. Since then, the real Fed rate averaged minus 1.3% until February 2022 and was minus 3.75% in October 2022.
One may say that we had normal market conditions until the global financial crisis. From then until February 2022, we had artificial markets resulting from the Fed's quantitative easing and zero interest rate policies. These policies were aimed at supporting the US economy and achieved colossal asset price inflation.

The Monthly Review of Portfolio Performance to 31 October 2022 also reflects the editor’s views on current developments and their impact on investment markets. Download it here...
Death benefits from a pension fund – are tax directives required?
A pension fund client enquired with NAMRA if it is required to obtain tax directives on death benefits it distributed to dependants and nominees of deceased fund members. In response, a senior NAMRA official stated the following: “The Fund is obligated to request for a tax directive in terms of Schedule 2, paragraph 9. (3) of the Income Tax Act, No. 24 of 1981, as amended, read with the definitions in paragraph 1 of Schedule 2. The Fund is required by law to request a tax directive when a Lump Sum Death Benefit is payable.”
We disagree with the opinion expressed by the NAMRA official, as Schedule 2 only directs that a fund (and its administrator) must obtain a tax directive on amounts falling within the definition of gross income. Any amount not defined as gross income falls outside the reach of the Income Tax Act (ITA), and the ITA has no bearing on it.
Paragraph (d) of the definition of gross income considers all lump sum benefits from pension funds as gross income. However, it explicitly excludes certain lump sum benefits, which are thus not gross income (one-third at retirement, any disability benefits, and death benefits).
Lump sum death benefits from a pension fund are specifically excluded from gross income under paragraph (d). Section 9(3) of Schedule 2 of the ITA does not apply to such benefits. Therefore, the fund (and its administrator) does not have to apply for a tax directive. The official PAYE 10 table also explicitly excludes pension fund lumpsum payments on death and retirement.
As the fund and the administrator are directed to obtain tax directives, the fund can leave the execution to its administrator or instruct the administrator to obtain tax directives if preferred.
The legislative reform conference 2022 – a comment
At the NAMFISA conference held in Swakopmund on 12 and 13 October, risk-based supervision was heralded as the non-plus-ultra for regulatory supervision. NAMFISA prides itself of the regulatory reform that will move the NBFI sector from compliance to risk-based supervision. While this may be a laudable objective, I have yet to understand what was wrong with the relatively cost-effective compliance-based approach of the past, other than being cautioned not to “wait for a burning platform”.
I cannot help feeling that Namibia took a bottom up, instead of a top-down approach to risk-based supervision. Where we – the retirement funds industry - had around 30 compliance requirements under the Pension Funds Act, we will have over 600 under the FIMA. In drafting the FIMA with its standards and regulations, we consulted all available text book of best practices across the world to compose our new legislative and regulatory framework. What we should have done is to identify the risks inherent in our industry and designed the risk-based framework to cover these risks. Obviously, our industry does not encompass all risks that other markets may experience and we may experience some risks that other countries may not experience. Nowhere in any of the presentations did I see any reference to ‘appropriate measures’, although that is quite topical in global discourse on this topic.
Should you allow a disabled member to go on early ill-health retirement?
Many funds offer a disability income benefit to members insured with an insurance company. When a fund member becomes disabled, the member would be entitled to an income benefit, paid by the insurance company that would effectively replace a certain percentage of the salary the member used to earn from employment prior to disablement; usually between 60% and 100% of his previous salary. The disabled member would remain a member of the fund. The insurance company usually also takes over the employer contribution towards the fund, in respect of the disabled member. The member must continue to contribute to the fund as if he was still employed, but the contribution would normally be deducted from the income benefit payable by the insurance company and be paid over to the fund. As a member of the fund, the disabled person would also remain entitled to the death benefit the fund offers, that is also usually insured with an insurance company.

The employer of this member would usually terminate the employment of the employee upon his disablement. The employer’s contributions would be taken over by the insurance company so the employer no longer has any obligation towards the former employee in this regard. Where the fund’s rules (and the Income Tax Act) requires that membership of the fund must be a condition of employment, the termination of employment as the result of disablement, would then imply that the disabled member cannot remain a member of the fund unless the rules specifically provide that a disabled member will remain a member of the fund, notwithstanding the fact that he is no longer an employee of the employer, and most rules do provide for this. The relationship of the disabled member with the employer would thus be severed and the disabled member would now be a member of the fund is his own capacity as provided for in the rules. Usually, rules would link the conditions of the disabled member’s continued membership to the terms and conditions set out in the insurance policy under which the disability income benefit is being paid to the disabled member.

Fund rules would normally describe under what circumstances a member becomes entitled to a benefit, such as termination of employment, death or retirement; all of these reasons being linked to the employee’s employment. For employed members, these would cover all possible reasons for membership termination, other than disablement elaborated above. The retirement rule would normally provide for early, normal or late retirement where early retirement is normally at the discretion of the employee, normal retirement manifests the obligation of the employee to retire and late retirement is at the discretion of the employer.

As pointed out above, the terms and conditions applicable to a disabled member who is no longer employed are usually linked to the terms and conditions of the policy providing the benefit. Clearly in the absence of an employment relationship, there can be no termination of employment due to resignation, dismissal or retrenchment, yet the benefit has to cease at some stage. Rationally this is either death or normal retirement and this is usually also what the disability insurance policies provide for. Where the rules of a fund link the disability benefit to the insurance policy, fund membership of the disabled member can only terminate as provided in the disability insurance policy. Where the rules do not explicitly link the disability benefit to the disability insurance policy we would argue that the only reason for termination of fund membership remains the termination of payment of the disability benefit by the insurance company, which would be upon the earlier of recovery, death or reaching normal retirement age.

We are regularly confronted with requests by disabled members receiving a disability income benefit, to terminate their fund membership for whatever reason but more often than not the member being after the ‘pot-of-gold’ he has in the pension fund. This would not be in the interests of the disabled fund member or his dependants who will lose the continued contribution by the insurance company, the benefit payable in the event of the death of the disabled member and any investment returns on the money that will continue to be invested on behalf of the disabled member, until the earliest of recovery, death or retirement.

Besides the fact that the early retirement of a disabled member will seriously prejudice the disabled member, section 37A of the Pension Funds Act explicitly prohibits the member to sacrifice his benefits in stating that “…no benefit provided for in the rules of a registered fund (including an annuity purchased or to be purchased by the said fund from an insurer for a member), or right to such benefit, or right in respect of contributions made by or on behalf of a member, shall notwithstanding anything to the contrary contained in the rules of such a fund, be capable of being reduced, transferred or otherwise ceded, or of being pledged or hypothecated, or be liable to be attached or subjected to any form of execution under a judgment or order of a court of law, …, and in the event of the member or beneficiary concerned attempting to transfer or otherwise cede, or to pledge or hypothecate such benefit or right, the fund concerned may withhold or suspend payment thereof…”

The disabled member thus has a statutory right to the benefits offered by the rules to a disabled member which right cannot be disposed of by the disabled member or even allowed to be disposed of by the fund and these rights can be sued for by the disabled member and/ or his dependants at any time in future. Prescription will never apply to this right. Trustees are advised to ignore any request by a disabled member to be allowed to take an early retirement benefit.

Can your employees deduct voluntary contributions to the fund?
The contract of employment

One principle of the Income Tax Act is that expenses can only be claimed for tax purposes if they were incurred in the production of income (refer section 17(1)(a).
In the case of employees, Inland Revenue will not accept any claim for discretionary expenses the employee incurs. An employee can only claim expenses he is required to incur in terms of his employment contract. In other words, your salary depends on your incurring certain costs. These costs are incurred in the production of income as contemplated in section 17(1)(a).
Suppose an employer can formulate the employment contract in such a way that a pension contribution in respect of the employee's bonus is an obligation. In that case, the employee should be able to claim that expense. If the decision is left to each employee, the employer should find it is impossible to formulate it in the contract as an obligation. It does not mean that every employee has to have the same employment contract. Specific employee categories or certain employees can have a special provision in their employment contract that others do not have, to make the contribution obligatory.
The fund rules
Most fund rules provide for voluntary contributions by members. We caution against using this clause as the heading is problematic, referring to 'voluntary'. As pointed out above, the word 'voluntary' means the employee is not required to make the contribution and would thus not be incurred as a condition of employment to produce income from employment.
It is crucial that the rules of the fund mirror the employee's employment contract. Thus, if a contribution calculated on a member's bonus is a condition of employment, it should not be referred to as 'voluntary contribution' in the fund's rules.
The Income Tax Act and fund contributions
The definition of 'pension fund' in subsection (b)(i) requires that the rules of a fund provide that '…all annual contributions of a recurrent nature of the fund shall be per specified scales…'. The definition of 'provident fund' also lays down this requirement. Typically, this refers to the contribution percentages at which members contribute monthly, but it can also be fixed amounts. The definitions do not make any reference to any other contributions.
Employees may currently deduct a maximum of N$ 40,000 per annum for contributions made to all approved funds and study policies. The Minister of Finance recently tabled an amendment in the Parliament to increase the N$ 40,000 to N$ 150,000 per annum.
Section 17 of the IT Act deals with 'General deductions allowed in determination of taxable income'. Section 17(1)(n)(i) sets out that the employee may deduct '…by way of current contributions [which are required to be according to specified scales per definition of 'pension fund' and 'provident fund'] in the year of assessment and directs that '…such contribution is a condition of employment…' The IT Act contains no other specific provision that allows any deduction for contributions to a pension fund, and we do not refer to a transfer of accumulated contributions to another fund.
As set out above, the principle of the IT Act militates against an employee deducting any expense that he was not required to incur in the production of income [and that can only be achieved through the contract of employment].
The above sets out the dilemma of employers or funds wanting to allow staff to make additional contributions to their fund. It indicates what route the employer and the fund should take to achieve their goal of employees contributing at a higher rate to the fund or on ad-hoc remuneration amounts.
We caution employers and funds not to create an impression toward employees those voluntary contributions are tax-deductible. It is worse to offset voluntary contributions from an employee's salary in determining the taxable income unless it is confirmed that Inland Revenue will allow such a deduction for tax purposes. The employer runs the risk of these contributions being added back to the employees' taxable income by the Receiver of Revenue! Ignoring the IT Act prescriptions could result in penalties and interest being levied against the taxpayer and a fund losing its tax-approved status

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 a consultant
Dated 11 October 2022
  “Hi K
Hope you are well.
Congratulations for the name change. I waited for an invitation so that I can celebrate with you and your great team but it seems technology did not do justice on me.
I believe it is only the name change and not culture and work ethics change ? ? ?. I am saying this because you do have such a great team. In particular, T_ _ _ C_ _ _. He such a world class asset. He works so well and communicates greatly. I have been working with him on R_ _ _. He is such a joy to work with. He always amazes me with his talent and dedication. He makes everything flow so easy and efficiently. He is such as a superstar who brings a lot of positive energy and coordinates well action items.
Well done to the name change!

Read more comments from our clients here...
Benchmark: a note from Günter Pfeifer
Annual member meeting: 17 November
The virtual annual member meeting was held on 17 November. Around 140 members attended. The agenda covered the following topics:
  • Benchmark investments by Raazia Ganie, NMG Consultants and Actuaries
  • Retirement savings? Who cares? What you should really care about! by Anne Cabot-Alletzhauser, GIBS
  • External audit by Louis van der Riet, PWC
  • Actuarial valuation, by Colin Hendriks, SAPN
  • Fund update by Sophia Amoo-Chimunda, principal officer 
Annual member meeting: member feedback
Attendance of in person annual member meetings showed a strongly declining trend over the last few years preceding COVID. Then came COVID and bearing in mind, the declining trend the trustees thought is better to move to virtual meetings with a positive outcome for attendance to date.
A long-standing member of the Fund, Mrs. Hanne Hügel took the trouble to pop us a mail this year on the virtual format of the annual member meeting. This is something to ponder on for the future! Readers are invited to share their views.
“Dear Bianca/RFS-team
Over the years and my about 20 years as a Benchmark-member I have always made an effort to join the REAL LIFE annual general meetings, since I have found them to be very informative.
Since the advent of C and the move to online events, I have never again joined these meetings, as informative as they may have been. It is just not the same to “do such occasions online” – for me at least.
Probably it is all good for the younger generation, but for us pensioners, there is a stop to too much digitality, at least for me.
I am not fond of sitting too much and too often in front of a box/screen, I prefer the interaction with humans, the energy that prevails, the exchange …
Thank you to the Benchmark/RFS-team, in particular Tilman Friedrich, who over the decades did their best to just go the extra mile, especially their monthly report in an attempt to keep their members enlightened and informed.
I do however sorely miss the “human contact”-meetings of yonder years. … not all that comes with development is in the end good, too much FORTSCHRITT as the Germans call it, may just be a step in the wrong direction. Too much digitalization, too many robots, too much autocracy is not always for the good of Humankind.”
Benchmark: The umbrella fund of choice – its service levels
If you consider moving your private fund to an umbrella fund to rid the company and the trustees of the onerous FIMA requirements, or to establish a new fund for your employees, the Benchmark Retirement Fund is the benchmark amongst umbrella funds. Here are a few pertinent reasons:
  • Dedicated fund administrator
  • Dedicated relationship manager
  • Strict turnaround times
  • Choice of underwriter
  • Choice of employee benefit consultant
  • Choice of investment manager
  • Exceptional team expertise
  • Focus on fund administration
  • Expert board of trustees
  • Annual actuarial valuation
  • All regulatory reporting done on time 
Important circulars issued by the Fund

The Benchmark Retirement Fund did not issue any circulars since circular 202207 on changes to the Benchmark Default Portfolio. Clients are welcome to contact us if they require a copy of any circular.
Günter Pfeifer was the Principal Officer and a trustee of the Benchmark Retirement Fund for many years. He holds a Bachelor of Commerce (Cum Laude). Günter completed his articles with Deloitte & Touche in Windhoek. 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
Saying goodbye is never easy!
RFS regrets to advise that Glenrose Norich will be leaving our employ at the end of November to pursue other interests. Glenrose joined us in 2012. While we are sad to see such dedicated person leaving, we wish her only the best for the future and hope her dreams will come true!
RFS welcomes new staff members
RFS extends a hearty welcome to the following staff who join our permanent establishment on 1 December 2022:
  • Venessa Stemele
  • Maria Gabriel
  • Sebastian Frank-Schultz 
Venessa was born in South Africa, but her parents moved to Namibia very early in her life. She matriculated at David Bezuidenhout High School in 2010 whereafter she completed a Bachelor of Administration degree at Polytechnic Namibia. Her working career kicked off in 2014 when she started as a temporary worker at Momentum. Venessa was permanently employed as an Administrator in the employee benefits department of Momentum in April 2015. She left Momentum for a period of few months in 2020, first to join Alex Forbes and then Old Mutual, but she returned to MMI in 2021. Venessa was assigned to the Benchmark administration team.  

Maria, is a born Namibian who matriculated at A Shipena Secondary School in 2004. She grew up in a normal Namibian household with 3 brothers and 4 sisters and extended family. During her working career she gained experience as an office administrator at Namibia Development Fund, LSI Foundation and Capri Executive Homeware. She also worked as a swimming instructor.  Maria is fluent in English, Oshiwambo, Afrikaans and Otjiherero.  Maria was also assigned to the Benchmark admin team.

Sebastian was appointed as a client manager in the Benchmark team. Sebastian spent time with RFS during university vacations between 2007 and 2010.

He is a born Namibian and completed his schooling at the DHPS in Windhoek. He studied at the University of Stellenbosch and completed his articles with Deloitte in Namibia.  During his articles he was an audit team member on FNB, NAMFISA and the NSX. He qualified as a Chartered Accountant in 2014 and has been a member of ICAN since then.

Sebastian was seconded to Deloitte Luxemburg in 2014, and what was supposed to be a secondment for a few months, became a four-year stint as audit manager. He joined a private equity investment company, Avega S.à r.l. in January 2018, but decided at the end of 2021 that it was time to return home. He joined EOS capital in January this year as Senior Associate Finance, before joining RFS.

Sebastian is married to Birte, born Pack, farmer’s daughter from the Witvlei area. His sport interests are soccer, tennis, and table tennis.

We look forward to him making a mark in our industry and RFS in the years to come and proving his mettle with his Benchmark clients.
Economist Businesswomen Club breakfast
The Economist Businesswomen Club presented a business women networking breakfast that four of RFS’ businesswomen attended. The key note address was “Rethinking Resilience: A leadership challenge”, presented by Rosalia Martins-Hausiku, CEO of the MVA Fund Namibia.
The organisers, a sponsor and the guest speaker flanked by Caroline Scott, Carmen Diehl and Sharika Skoppelitus on the left and Rauha Hangalo on the right.
Important circulars issued by RFS
RFS did not issue any circular since circular RFS 2022-07-09 on PI cover of service providers. Clients are welcome to contact us if they require a copy of any circular.

News from NAMFISA

Legislative reform conference 2022
Namfisa arranged the Legislative & Supervisory Reform Conference, during 12-13 October 2022 at the Strand Hotel, Swakopmund. Here is a list of the papers presented at the conference:
  1. Risk based supervision – a global response to protecting consumers and maintaining financial stability, by Karl Hiraldal of the Toronto Center
  2. Risk based supervision – the Ghana experience, by Albert Oko Dagadu
  3. Social security context of pension funds, by Dr Manfred Zamuee
  4. Anchoring relationships, by Easvarie Naidoo
  5. From compliance to risk-based supervision, by Mark Schrijver of the World Bank Group
  6. Thought leadership: the role of long-term savings in advancing social security and social mobility in Namibia, by Anne Cabot-Alletzhauser, director at the Gordon Institute of Business Science at the University of Pretoria
  7. Market conduct risk in financial business and growth, by James Norman, international business development director of Sedgwick
  8. NBFI legislative and supervisory reform, by Kenneth Matomola of NAMFISA 
The presentation I found particularly telling and relevant to our situation in Namibia was that of Easvarie Naidoo, who made the following important points concerning the anchoring of relationships:
  • Regulatory changes requiring collaboration with the industry
  • Information gathering and collation of industry inputs
  • Understanding the industry environment
  • Ensuring mutually beneficial outcomes for both the Regulator and the regulated entities
  • Communication process enabling buy-in
  • Roll-out of changes, including industry participation
  • Ownership of change process by industry 
Upcoming pension fund industry meeting
NAMFISA arranged the last industry meeting for the year to be held at Arebbusch Travel Lodge on 24 November.
The NAMFISA presentation for the meeting reveals a few interesting snippets as per our below comments:
The NAMFISA Board has approved most standards and regulations, following the incorporation of comments on the published drafts (slides 40 – 41). Two standards will be re-published and 1 new standard will be published (slide 42). A list of the approved standards and regulations is attached to the agenda.
The following standard was not approved and is also not included in the list of standards to be re-published:
  • RF.S.5.11 Alternative forms of payment of pensions for the purposes of defined contribution funds. This Standard applied to “the balance of a member’s individual account or retirement income account that is available for conversion into a retirement income after the payment of such portion thereof as a lump sum, …” i.e. was the reason why we said that FIMA does not require compulsory annuitisation of retirement benefits. Slide 10 of the NAMFISA industry presentation dealing with FIMA re-registration plan update mentions under “Provisions affecting preservation and provident funds” provision (b) of the definition of “defined contribution fund” and that it “drives primarily towards annuitization of retirement benefits…”. Could the omission of RF.S.5.11 be deliberate to achieve compulsory annuitisation of retirement benefits? We noted a number of discrepancies to the Income Tax Act in this standard, so this could be a further reason why the standard was not published.PRE.S.1.1 The categories of professions and persons of which an expert must be a member for the purposes of the definition of “valuator” in section 1 of the Act.
  • RF.R.5.4 The prescribed funds or beneficiary funds that may be exempted pursuant to section 262(1)(b) – this regulation did not serve any purpose as it stated what the Act already stated.
Further standards/ regulations not approved and not included in standards/ regulations to be re-published:
  • PRE.S.1.1 The categories of professions and persons of which an expert must be a member for the purposes of the definition of “valuator” in section 1 of the Act.
  • RF.R.5.4 The prescribed funds or beneficiary funds that may be exempted pursuant to section 262(1)(b) – this regulation did not serve any purpose as it stated what the Act already stated.
  • RF.R.5.10 The preservation of retirement benefits – as expected 
For a glimpse of the meeting content, download the NAMFISA presentation, here...
Legal snippets
Payment of pension benefits into jointly held accounts

The Pension Funds Act obliges the fund to ascertain that any benefit due to a member is paid to the member for his/her exclusive benefit. Typically, the fund administrator is responsible for making payment on behalf of the fund and is well advised to ascertain that it complies with the Act by verifying the ownership of the bank account into which payment is to be made.

Payment directly into a bank account that is not subject to a person’s exclusive authority and control may be regarded as being made in contravention of the Pension Funds Act.

The Banks Act does not prohibit the maintenance of joint bank accounts by Namibian banks. It is therefore prudent that pension funds do not allow payment of pension benefits into a joint account as this may be a contravention of section 37A of the Pension Funds Act.

An indemnity by a member issued to a fund for making payment into a joint account at the request of the member will, in our opinion, not protect the fund against a claim by the member and/or a prospective beneficiary and should not be accepted by a fund.

Admissibility of affidavits as evidence in death benefit claims

“Under SA law, an affidavit is a statement made under oath by an individual to a Commissioner of Oaths. While the person making the statement does so with the knowledge that if it contains false information they could face a jail sentence, this doesn’t necessarily mean that the affidavit is proof of the claims it contains. This means that trustees should be wary of simply accepting affidavits as substantial evidence to back a benefit claim.”

Section 37 requires the trustees to
  • identify dependents
  • effect an equitable distribution between dependants and nominees and
  • determine an appropriate mode of payment.
The SA Pension Funds Adjudicator believes trustees must consider the following factors when deciding on the distribution of benefits:
  • the age of the parties,
  • the relationship with the deceased,
  • the extent of dependency, the financial affairs of the dependants and
  • the future earnings potential and prospects of dependants.
In the case of Maake vs Old Mutual Superfund and Old Mutual Life Assurance Company, the adjudicator’s ruling shows that affidavits alone are not enough.

Download the full article by Wahida Parker in Pensions World of June 2015, here…
Fund must ensure employer pays member’s contributions 

“A fund has a duty in terms of the Pension Funds Act to ensure an employer complies with payment of provident fund contributions, says the Pension Funds Adjudicator.

Muvhango Lukhaimane was critical of the Private Security Sector Provident Fund (first respondent) for not reporting Volsec Security (SA) (Pty) Ltd (second respondent) with the FSCA for non-compliance.
The first respondent has a duty placed on it by the provisions of section 13A of the Act to take all reasonable steps to ensure that contributions are paid in accordance with the Act.
It is clear that the first respondent has failed to take any steps against the second respondent," Ms. Lukhaimane said.
She was commenting in a determination following a complaint by JB Nxumalo that the second respondent had failed to timeously register as a participating employer in the first respondent; register the complainant as a member thereof; and pay all provident fund contributions due on his behalf. This subsequently resulted in the non-payment of his withdrawal benefit.
The first respondent submitted that the complainant was not its member as the second respondent did not enroll him as such. The first respondent submitted that the second respondent defaulted in respect of enrolling the complainant as its member as well as in respect of contributions required to have been paid.
The first respondent concluded that it could not pay any benefit that would have been secured by contributions that were not paid to it.
In her determination, Ms. Lukhaimane said it is compulsory for employers and employees in the private security sector to register with the first respondent and pay contributions to the first respondent as per the Sectoral Determination.
By not registering the complainant as a member of the first respondent, the second respondent failed to act in accordance with the Sectoral Determination.
The second respondent and its employees should under all times participate in the first respondent. To ensure compliance with the Sectoral Determination and the relevant rules of the first respondent, the first respondent and the Private Security Industry Regulatory Authority ("PSIRA") must take appropriate steps to ensure that the second respondent registers its qualifying employees with the first respondent.
Ms. Lukhaimane said the first respondent must allocate all contributions received from the second respondent up to July 2016 in order to establish whether there are any further outstanding contributions due by the second respondent.
She said the matter will be referred to PSIRA for investigation of the second respondent regarding its unlawful conduct. PSIRA is mandated to regulate the private security industry and exercise control over the practice of the occupation of security service providers.
The second respondent was ordered to timeously register as a participating employer in the first respondent, register the complainant as a member of the first respondent and pay contributions on his behalf.
The first respondent was ordered to pay the complainant's withdrawal benefit upon receipt of contributions from the second respondent.”
Reported in the SA Adjudicator’s annual report 2018 – 2019

Snippets for the pension fund industry
 South Africa’s top fund managers’ stock picks in October 

“Although the market can fall in the short term, it will rise again and reward investors who bought quality companies during this downturn.
Billionaire investor Bill Ackman said the current market offers a good entry point, similar to early 2020.
This is another good moment. I don’t know how well you are going to do over the next six or twelve months, but over the next few years, it is a good place to be an investor,” he said.
However, it came with a caveat. “You want super high-quality, well-capitalised, dominant businesses that you know will be here 30 years from now.
It raises the question of which companies South Africa’s top analysts and fund managers see as the best picks.
To answer this question, Daily Investor summarised the stock picks from these investors over the last month.
It revealed a strong bias towards local stocks – 70% of October’s share picks are companies listed on the Johannesburg Stock Exchange (JSE).
MTN was a firm favourite, with Annatjie Van Rooyen, Carmen Mpelwane, Jonathan Fisher, Martin Smith, and Rob Towell saying it offers good value.
Other popular South African stocks include TFG, Sappi, Reinet, Naspers, City Lodge, and AVI…”
Read the article in Daily Investor of 3 November 2022, here…
This one mistake can cost you big at retirement

“People are still cashing out their retirement savings, facing massive losses in the long term, says financial services firm 10X Investments.
The group has published the latest edition of its South African Retirement Reality Report 2022, showing that even when people have been exposed to the structured nature of retirement savings through a formal employment-based retirement scheme – 60% of people who have left a corporate scheme cashed out their savings…
A much better choice for those people would have been to take their savings to their new employer’s fund or ringfenced them (and the associated tax benefits) in a preservation fund, said 10X Investments. The loss of the growth of those savings, which compounds over time, is almost always significantly more than the loss of the amount saved.
For example, if two 25-year-olds were to start by contributing R1,000 every month to their retirement fund and then, 10 years later, one of them cashes out, not only would they suffer a tax penalty imposed by SARS but the long-term gains from compounding contributions…
To put it another way, R10,000 withdrawn at age 25 means R115,000 less money in retirement, said 10X Investments. Or, more practically, someone who withdraws R300,000 at age 35 will have R2,1 million less money in retirement (in today’s money terms) than they could have had…”
Read the article by Staff Writer in Businesstech of 9 November 2022, here…


Snippets of general interest

SA schools’ tactics to get parents to pay up

 “Credit bureau TPN said that fewer than 60% of parents pay their school fees on time in South Africa, with the situation only getting worse after the Covid-19 pandemic in 2020 and 2021.
Many parents are under the misconception that non-payment of school fees won’t affect their credit record, but TPN said that schools could freely list non-paying parents with credit bureaus in the country, which counts against their credit records.
Independent and fee-paying public schools are heavily reliant on parents to pay school fees, it said.
The reality, however, is that less than 60% of parents pay their school fees on time. This has a significant knock-on effect on a school’s finances, severely impacting their ability to meet their operational costs…”
Read the full article in Businesstech, here…
The 15 best universities in South Africa for science, technology and engineering

 “The Times Higher Education World University Ranking claims to be the only global performance table that judges research-intensive universities across all their core missions: teaching, research, knowledge transfer and international outlook.
It uses 13 carefully calibrated performance indicators to provide the most comprehensive and balanced comparisons, trusted by students, academics, university leaders, industry and governments.

The performance indicators are grouped into five areas:
  • Teaching (the learning environment);
  • Research (volume, income and reputation);
  • Citations (research influence);
  • International outlook (staff, students and research); and
  • Industry income (knowledge transfer).
For the subject rankings, the same indicators are used but are recalibrated per subject, with the weightings changed to suit the individual fields.
The group’s subject rankings look at 11 broad fields of study, including arts and humanities, law, education, health, science and technology, among others. Businesstech looked at which universities ranked top in technical fields, including Computer Science, Engineering and Physical Sciences.
15 universities from South Africa ranked among the top in the world in these subjects, with nine featuring in the computer science ranking, 10 in the engineering ranking and 15 in the physical science ranking.
Stellenbosch University (SU) ranked as the top school for computer science in the country while ranking in the same band as two others for engineering. Six universities ranked within the same band for physical sciences.
SU shares first place in Engineering and Technology with Unisa and North-West University while leading the way in Physical Sciences alongside North-West University, the University of Cape Town (UCT), the University of the Free State, Rhodes University, and the University of the Western Cape…”
Read the full article by Staff Writer in Businesstech of 28 October 2022, here...
The first step in becoming a great leader
The first step in becoming a great leader is understanding yourself and your own leadership abilities and characteristics. Do you have what it takes to be a leader? This concept is also referred to as “Self-Leadership” and requires some introspection into your personality, attitude, beliefs and core values. Even though anyone can become a leader, not everyone always wants to be a leader. Getting promoted into a higher position does not automatically make you a leader, it simply makes you another manager who has been given power to control and command.
Read the short pieces of wisdom by Rowan van Dyk on LinkedIn, here…
Leaders that truly are catalysts need to be humble
“Being humble does not mean that you cave into any adversity or that you do not exert your authority as required. Instead, being humble implies that as a leader you are often times prepared to take the back seat and let the team members who have more proficient skills in a particular area apply their skills to complete the task or solve the problem. Being humble means that you as the leader accept that you are not necessarily the expert in every situation and that the reason you have a team of followers is that they too possess certain skills. If you harness those skills, you can better achieve your end goal or objective. Humility also can include servant leadership. The assumption is that if leaders focus on the needs and desires of followers, followers will reciprocate through increased teamwork, deeper engagement, and better performance.”
Read the short pieces of wisdom by Rowan van Dyk on 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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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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