New Nedbank solution protects the futures of vulnerable beneficiaries

Nedbank Group today unveiled its new Nedgroup Beneficiaries Solutions, a registered and audited pension fund administration vehicle that can receive beneficiary payouts from retirement funds.

According to Robert Likhanya: Head of Nedgroup Beneficiary Solutions & Nedgroup Beneficiary Funds at Nedbank Group, the new solution has been designed specifically with the unique requirements of young, and often vulnerable, fund beneficiaries in mind and will ensure that the fund benefits that are due to them are utilised to secure the best possible future for them.

Likhanya explains that this cost efficiency is especially important for younger beneficiaries because it is vital to the longevity of their benefit payments. So by reducing the cost of the administration, Nedbank Beneficiaries Solutions effectively ensures that the capital asset is maintained for the longest possible time.

“Of course, every beneficiary’s situation is different, so a one-size-fits-all beneficiary solution is not the way to meet their unique requirements,” says Likhanya, “which is why Nedgroup Beneficiaries Solutions ensures that their money is managed to ensure they receive the income they need, when they need it.”

Likhanya points out that this type of flexible income solution is vital for maximum beneficiary benefit, particularly when it comes to securing their education.

By way of achieving this objective of maximising the support of the ultimate beneficiaries, Nedgroup Beneficiaries Solutions product offering moves away from the typical single service beneficiary fund to deliver a differentiated and cost-effective solution that can be tailored to each beneficiary’s specific needs.

Since 2009, the regulations governing beneficiary payments from retirement funds were changed to ensure that all such payments would be made into purpose-designed beneficiary funds. These are governed by the Pension Funds Act and therefore offer better protection against potential misuse of beneficiary funds belonging to minors.

However, according to Likhanya, while this change in legislation has achieved far greater levels of protection for minor beneficiaries, Nedbank Group recognised that more can be done to protect the funds of these vulnerable members of society.

“This insight was at the heart of the development of Nedgroup Beneficiaries Solutions,” Likhanya explains, “and prompted us to design the product in a way that ensures that minor beneficiaries enjoy the maximum benefit from their beneficiary payouts by putting that money to work creating the best possible future for them.”

“Next to day-to-day cost of living requirements, education is the single most important element in securing the future of every minor beneficiary,” he emphasises, “and Nedgroup Beneficiaries Solutions has been specifically designed to ensure that each beneficiary’s education funding needs can be met.”

The potential for abuse of funds earmarked for education by guardians or caregivers has also been reduced within Nedgroup Beneficiaries Solutions through the implementation of rigorous checks and balances. Before a guardian can obtain financial assistance for a beneficiary’s education, he or she must provide the administrator with a quote or invoice from the relevant school, college or educational institution. Once approved, this financial assistance is then paid directly to the institution concerned on behalf of the beneficiary.

And, according to Likhanya, the long-term beneficiary support provided by Nedgroup Beneficiaries Solutions is not limited to education. “Each beneficiary’s circumstances and risk situation are fully assessed at the time of investment,” he says, “so that the Trustees can develop and implement an appropriate investment strategy – one that will ensure that the beneficiary gets the full benefit of the money invested on their behalf, and that the funds work as hard as possible to help them enjoy the future they deserve.”