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Retirement Planning
Tuesday, May 1, 2007
Call to account

Many of South Africa’s estimated 54 000 retirement fund trustees are in urgent need of training to assist them in meeting their obligations to help stop the on-going misappropriation of money belonging to members and their beneficiaries.
Speaking on the occasion of the 21st anniversary of the South African Local Authorities (SALA) Pension Fund, chairperson Bongani Maphanga, said, “It is necessary to ensure the effective prosecution of offenders while also improving supervision, monitoring and accountability.
“Asset managers and advisers must be called to account in terms of strict rules which, if flouted, should result in the immediate termination of mandates. Transparency is the industry’s buzzword and service providers reluctant to open themselves to scrutiny run the risk of losing business.”
He added that legislation gives fund trustees strong powers in a number of areas, including the appointment and termination of service providers, especially when the interests of members are being compromised.
Mr Maphanga said trustees needed to ensure they were beyond reproach and on top of the complexities of running a fund. “Trustees need to work harder at ensuring that they deal with those to whom they have delegated responsibility from a position of strength.” He added that the Pension Fund Amendment Bill, expected to go before parliament shortly, would assist in terms of strengthening the powers of regulators as it provided for immediate intervention should a problem with a retirement fund or financial services company be suspected.
“The amendments would also empower the Registrar of Pension Funds to act in replacing trustees in the event of maladministration. These proposals come in the wake of financial scandals, including the undisclosed profits made by Alexander Forbes from bulking and the financial mismanagement by asset management company Fidentia. We hope that the amendments will help prevent similar illegal activity in future.”

Copyright © Insurance Times and Investments® Vol:20.4 1st May, 2007
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