Retirement Reform Southern Africa 2009, 28 - 30 October

Who will be there?

You can expect to meet numerous delegates from the Financial, Government and Retirement Sector at the conference this year. Through our intensive research and development department we have identified the needs for organisations on the African continent to critically review the implementation of Pension Funds Reform strategies in order to promote their social service delivery standards. Internationally pension reform strategies are showing results of significant success, whilst local corporations are strategically aligning their internal policies for the effective implementation and execution of fund reformation strategies.

World-class conference experience

Conference sessions will once again explore the state of the Southern African pension fund industry, highlight the business imperatives, outline current and future trends, present latest strategies and development, and explore powerful financial business applications relating to pension fund governance and reform. It will provide a framework for the successful migration of skills and present proven implementation methodologies through enlightening case studies.

The Retirement Reform Southern Africa 2009 event is more than just a conference. It is a meeting place of the biggest strategists, service providers and experts that provides support for the African retirement benefit sector. They will gather at this comprehensive 2009 conference to design business models and to ensure profitable implementation of strategies over a short span of time. The event will provide a stimulating conference experience with interactive panel discussions, case studies of successful implementation, and facilitated open sessions for you to debate and deliberates the issues you are facing.

Retirement Reform Southern Africa 2009 provides a timely platform for world-renowned service providers to come together and share how end-users can achieve enormous growth through effective strategic implementation. This event is poised to be one of the largest yet focusing the effective reformation of pension funds in Southern Africa. It provides delegates with a perfect opportunity to network and evaluate new trends and investment strategies when benchmarking their funds to the international market

Benefits of attending:

1.Exploring new released South African proposals on social security and retirement reforms
2.Aligning your fund management strategies to that of national reform proposals
3.Maximising reform opportunities in order to reach the needs of the poor
4.Obtaining best practice methodologies for securing effective fund governance and ethics 5.Securing workable strategies for fund growth and investment
6.Exploring the current economic climate for pension fund transformation in Southern Africa 7.Mapping out the biggest challenges for pension fund reforms in all of the Southern African countries
8.Scrutinizing international retirement reform strategies to obtain insight on local proposals and reform challenges
9.Analysing what might be expected from the risk based supervisory approach of the regulator in the future
10.Creating urgency for both private and public funds to adhere to governance, measures structures and mechanisms
11.Evaluating the required standards based on pension fund governance, trusteeship and management from an international perspective
12.Identifying strategies for developing effective accountability and sustainability procedures in pension reform
13.Exploring new required relationship needed between a pension fund and its service providers 14.Maximising the potential and hidden power in successful fund communication
15.Identifying the key factors that contributes towards the success of a retirement reformation & transformation process
16.Highlighting the challenges that administrators will face in the role-out of reform strategies 17.Elevating the level of professionalism needed in elevating and benchmarking the duties and responsibilities of pension fund trustees

Overview

The retirement funding system has been in place for a long time, and has an established body of legislation governing it, principally codified in the Pension Funds Act, promulgated in 1956. In the 1970’s, most retirement funds in South Africa and in fact worldwide were defined benefit funds, managed by employer-appointed boards of management. Benefit design favored retirement and death but penalised resignation: a member’s own contributions were refunded with a rate of interest lower than rates available on discretionary savings, and an increase (representing a share of employer contributions) was only included after a long period of service, in order to encourage employees to commit to their employer for the long-term. The 1980’s and 1990’s saw a dramatic transfer of employees from these defined benefit funds to defined contribution schemes. This was viewed positively by trade unions, which saw advantages for their members in the better resignation benefits offered by newly established national provident funds1, and by white-collar employees who sought to capture the investment rewards of a bull market. Employers preferred a defined contribution arrangement, since it provided for the capping of their personnel expenses, eased the introduction of package remuneration approaches, and it transferred the investment and expense risks to the employee. In most cases the old defined benefit fund was closed to new employees.

Today, the vast majority of employees in the private sector belong to defined contribution schemes, while public sector funds are still largely defined benefit arrangements. The South African environment has also seen considerable growth of multi-employer or “umbrella” funds. Such funds offer ease of access, especially for the employer, usually have lower unit costs than stand-alone retirement funds, which are to the advantage of the member, and frequently offer improved communication and administration facilities. Most of the large trade unions have established national defined contribution funds and have negotiated an option for their members to belong to such funds, as opposed to membership of an employer-sponsored fund. After the initial transfer of most of their in-service members to defined contribution funds, some defined benefit funds shrunk in membership to the extent that they were no longer financially viable. Collapsing them into the new defined contribution funds, but preserving features of the defined benefits that the members enjoyed, has given rise to hybrid arrangements, which therefore have features of both defined benefit and defined contribution funding.

Over the course of the past 48 years there have been numerous amendments to the Act, updating it where considered necessary in an ad hoc fashion, introducing features such as member-elected trustees, the Pension Funds Adjudicator, minimum benefits and surplus apportionment.

In addition, The South African retirement fund industry has been heavily influenced by a racially divided past and the parallel existence of developed and emerging components of our economy. There is a large and well-established private contractual savings sector, government employees are provided for through a near-fully funded retirement arrangement, but approximately three-quarters of the population reach retirement age without a funded pension benefit and hence rely on a government social assistance grant program. When evaluating the status of the current retirement benefit sector of Southern Africa one has to raise the question of reforms. With the amount of socially dependant citizens in Africa where does Southern Africa stand relation to international reform progress, trends and strategies? What are most critical requirements for fast tracking the reform process in Southern Africa?

Pension Funds Reforms

Social security and retirement funding arrangements can be thought of as organised around two complementary objectives. The first is assurance of a basic standard of living and prevention of destitution in old age, or in circumstances of unemployment or incapacity, which relies partially or fully on redistributive measures. The second is about encouraging saving to provide for income replacement in the event of death or incapacity, and after retirement from the workplace, through long-term insurance arrangements. These two objectives can be pursued through separate or integrated schemes, in various ways, and there is considerable variation internationally in the balance between these aspects. There are good reasons for building a new social security framework on the reform of the elementary retirement funding arrangements. The basic funding and administration arrangements for retirement can in turn provide a platform on which other basic social benefit arrangements can be developed, such as death and disability benefits and health insurance.

Many countries that have relied predominantly on mandatory state-run funding and administration in the past have sought to encourage parallel or supplementary private saving and insurance markets. The effects of ageing populations and rising costs of health care have led to concerns about sustainability and affordability, particularly in developed countries. Reform in these countries is about bringing greater diversity and private-sector participation into systems dominated by a mandatory earnings related pillar. On the other hand, most of the world’s poor have no access to social security, and current reform efforts in many developing countries are focused on basic social assistance to alleviate survival-threatening poverty and vulnerability. While international experience carries important lessons, South Africa’s social security reform challenge is unusual in several respects. A redistributive social assistance program is in place and there are well-established occupational and individual retirement funding schemes, but does South Africa still lack a basic, pooled, mandatory contributory system.

The broad principles proposed for these reforms are the following:

Equity – fair and equitable rates of contribution and benefits for all participants
Pooling of risks – collective funding arrangements and non-discriminatory rules and entitlements
Mandatory participation – compulsory participation of employees and the self-employed in the formal sector, and encouragement of voluntary participation by those in the informal sector
Administrative efficiency – streamlined use of payroll-based contributions, modern information systems and efficient payment arrangements
Solidarity – minimum benefits assured through continued social assistance grants programmes financed through the budget.

6 Insightful industry sessions to explore :

This insightful and comprehensive conference is specially designed to serve in all the immediate needs for the reform of local funds. The sessions are filled with the required industry knowledge and promise to deliver a wealth of information and that allows you to design reform strategies that are aligned with local retirement reform objectives.

Session 1 : Maximising Reform Opportunities in the Pensions World of Southern Africa

• Evaluating the current economics and investment climate for implementing new retirement reform strategies in Southern Africa
• Exploring what every fund manager and trustee should know to successfully implement reform strategies
• Exploring the world of international retirement reform and the opportunities that it allows for local reform

Session 2 : A New Reform Paradigm for Pension Fund Governance in Southern Africa

• Exploring the current Southern African pension fund governance and regulatory environment
• Analysing what might be expected from the risk based supervisory approach of the regulator in the future
• Evaluating how the effective implementation of fund governance can contribute towards fund reputation
• Investigating how you can upgrade the efficiency of your fund by adhering to sound governance structures that has been targeted towards successful industry transformation
• Creating urgency for both private and public funds to adhere to governance structures; herewith promoting social reform stability and opportunity
• Analysing new standards based on pension fund governance, trusteeship and management from an international perspective

Session 3: Exploring the power of effective fund relationships and communication in a reform environment

• Investigating the appropriate relationship between funds and their service providers
• Suggestions as to how the appropriate relationship can be elevated for effective reform
• Discovering how effective communication can contribute to the buy-in of members and stakeholders
• Ensuring premium world- class communication strategies on (a) Fund to the member (b) employer to employee

Session 4: An in-depth analysis of retirement reform and social security in Southern Africa

• Investigating the current “South African Pensions Reform Rationale” based on a brief introduction and background of reform
• Different issues faced by countries from the South African region and proposals as to how these issues should be dealt with
• In introduction to the processes, policies and principles of retirement reform and detailing the objectives in the process of pension fund reform and transformation
• Maximising reform opportunities in order to reach the needs of the poor
• Spotlight on Chile and Sweden - Why does South Africa keep a close eye on their reform strategies and objectives and what are the relationships that exist between our goals and their success?
• To what extend should mandatory participation for reform be elevated in South Africa
• Providing insight into what every fund manager, trustee and principal officer should know about retirement reform

Session 5: Exploring Reform Experiences from the African Continent

• Retirement reform experiences and challenges from a Central and East African Perspective; Highlighting retirement reform in Kenya, Uganda, Tanzania , Rwanda, Burundi and Zambia

Session 6: The role of the trustee in retirement reform

• Discussing the elevating level of professionalism needed in evaluating and benchmarking the duties and responsibilities of pension fund trustees

Program Day 1

08:00 Registration and Early-Morning Refreshments

08:30 Chairpersons Opening and Welcoming Remarks

Session 1

Maximising Reform Opportunities in the Pensions World of Southern Africa

08:45 A STRATEGIC OVERVIEW OF THE CURRENT ECONOMIC CLIMATE FOR PENSION FUNDS Reform IN THE SOUTHERN AFRICAN REGION

• This strategic session will investigate the current economic issues that have a direct impact on the success of pension fund growth in the Southern African markets.
• Challenges and opportunities in the development of reform policy and regulation
• Detailing what can be expected from the social security and retirement reform programme in South Africa
• Highlighting the current economic conditions that have a major effect on the reform process for South Africa
• Mapping out the biggest challenges that retirement funds of Southern Africa will be facing in the next 2 years

Elias Masilela

Chair of the Economic Research South Africa Steering Committee &

Chief Strategist

Sanlam

(Invited)

09:45 International keynote ADRESS: Exploring the World of International Retirement Reform : Experiences and Challenges from the globe

Dr José Piñera

President

International Centre for Pension Reform

(INVITED)

10:30 Mid-Morning Refreshments

Session 2

A New Reform Paradigm for Pension Fund Governance in Southern Africa

11:00 The Southern African GOVERNANCE AND regulatory environment

• Analysing what might be expected from the risk based supervisory approach of the regulator in the future
• Evaluating how the effective implementation of fund governance can contribute towards fund reputation
• Investigating how you can upgrade the efficiency of your fund by adhering to sound governance structures that has been targeted towards successful industry transformation
• Analysing the current governance measures, mechanisms and structures that has been developed to enhance industry efficiency
• Creating urgency for both private and public funds to adhere to governance structures; herewith promoting social reform stability and opportunity
• Detailing the relationship between reform, governance and
• Fund rules and regulations
• Protection of benefits
• Investment regulation
• Effective supervision

Johnathan Mort

Director

JOHNATHAN MORT INC

12:00 A COMPREHENSIVE OVERVIEW OF STANDARDS BASED ON PENSION FUND GOVERNANCE, TRUSTEESHIP AND MANAGEMENT FROM AN INTERNATIONAL PERSPECTIVE

• Evaluating the required standards needed in order to secure optimum fund management and governance
• Simplifying best practice in international pension fund governance and regulation
• Evaluating current processes and policy regarding the identification of responsibilities in pension fund management
• Modern approaches to international governance mechanisms that include, reporting, and disclosure, internal control and redress.
• Addressing some of the local regulatory concerns that are seen to be in conflict with international best practice and standards
• Identifying strategies for developing effective accountability and sustainability procedures

Baron Furstenburg

Head: Pension Reform Strategy

LIBERTY

South Africa

13:00 Networking lunch for all delegates and speakers

Session 3

Exploring the Power of Effective Fund Communication in a Reform Environment

14:00 FUND COMMUNICATIONS & REFORM: INVESTIGATING THE APPROPRIATE RELATIONSHIP BETWEEN PENSIONS FUND AND ITS SERVICE PROVIDERS

• Analysing current problems and pitfalls as part of the retirement reform process
• Suggestions as to how the appropriate relationship can be elevated for effective reform
• Discovering how effective communication can contribute to the buy-in of members and stakeholders
• Analysing communication as integral part of pension fund management
• Ensuring premium world-class communication strategies on: (a) Fund to the member
• (b) employer to employee
• Share performances: The need for trustees to continuously communicate fund benefits to members
• Ensuring communication standards are kept up to date on the fields of training and development, your education material supplier and call centre
• Internet communications: A modern approach for communication with members in Southern Africa
• Altering your communication strategies from price sensitive to service sensitive

Richard van Dijk

General Manager: Distribution Support

SANLAM

15:00 Mid-Afternoon Refreshments

15:15 Open Conference Discussion : The role of the Pension Fund Regulator in Retirement Reforms

Facilitated by Conference Chair

16:15 Chairman’s Closing Remarks

Program day 2

08:00 Early-Morning Refreshments

08:30 Chairpersons Welcoming Remarks

Session 4

An In-depth Analysis of Retirement Reform and Social Security in Southern Africa

08:45 THE SOUTH AFRICAN PENSION REFORM RATIONALE

• Brief introduction, history and background of reform in Southern Africa
• Analysing the current standing and status of retirement reforms in South Africa
• Detailing the issues faced by countries from the Southern African region
• An introduction to the processes, policies and principles of retirement reform
• detailing the objectives in the process of pension fund reform and transformation
• Highlighting the key proposals and processes that contributed to the current status of pensions reform:
• The 2002 report of the Committee of enquiry into a comprehensive system of social security for South Africa
• The 2004 National Treasury (1^st) Discussions Paper on Retirement Reform
• The 2007 National Treasury (2^nd) Discussions Paper on Retirement Reform
• Research undertaken on behalf of FOSAD Social Sector Cluster task team on comprehensive social security
• Understanding the underlaying factors for fast tracking the retirement reform process in Southern Africa
• Maximising reform opportunities in order to reach the needs of the poor

Rob Rusconi

Pension Fund Specialist

TRES CONSULTING

09:45 RETIREMENT REFORM: SETTING THE SCENE FOR SUCCESSFUL TRANSFORMATION

• Investigating the current international status of reforms globally
• What can administrators, fund managers and investors look forward to when it comes to the successful transformation and uplifting of their funds
• Current global indicators towards successful migration of pension fund reform strategies
• Spotlight on Chile and Sweden - Why does South Africa keep a close eye on their reform strategies and objectives and what are the relationships that exist between our goals and their success?
• Benchmarking Southern African retirement reform strategies to those of international counterparts:
• North & South America
• Europe
• East Asia
• Australasia
• Africa
• Detailing the success factors in some of the most successful reform processes globally in order to set the scene for what is needed locally
• Why is our reformation process so complex?
• What makes a successful retirement reformation process work?
• Investigating other contributing success factors to the implementation of social security systems globally

David O’Brien

Head of Retirement Reforms

Old Mutual

(Invited)

10:45 Mid-Morning Refreshments

11.00 PANEL Discussion : TO WHAT EXTEND SHOULD MANDATORY PARTICIPATION FOR REFORM BE ELEVATED IN SOUTH AFRICA; HEREWITH PROVIDING A SOUND FRAMEWORK FOR STANDARDISED ADMINISTRATION AND REDUCED RISK

• Evaluating how the introduction of a national savings fund will affect the viability of employer sponsored funds and umbrella funds
• Analysing the current role of both private and public pension funds in the industries decision making process
• Detailing how mandatory, universal fund participation in a pooled social insurance arrangement can recognise specific vulnerabilities
• Prioritising South Africa’s present circumstances and opportunities for retirement reform
• Discussing and re-evaluating the potential of the previously proposed tiers of mandatory contribution that included:
• Contributions to a national security fund
• Supplementary conditions to an occupational fund
• Investigating if basic social security arrangements, such as a low cost national retirement fund provide solutions in challenging economic times?

12:00 A COMPREHENSIVE INDUSTRY UPDATE ON PRIVATE PENSION REFORM IN SOUTH AFRICA: WHAT EVERY, FUND MANAGER, PRINCIPAL OFFICER AND TRUSTEE SHOULD KNOW ABOUT RETIREMENT REFORM

• Background and introduction to the private pension reform landscape in South Africa
• Highlighting the key regulatory challenges and requirements based on the reform of private funds
• Investigating the potential outcome of successful private fund reform strategies
• Detailing the hidden strengths and opportunities in the transformation of private funds
• Analysing the current economic landscape for private fund reforms
• Highlighting the challenges that administrators, fund managers and investors face when rolling our reform strategies
• Private Funds & Reform with reference to the preservation and protection of benefits: Where do the pitfalls lie?
• Comparing reform progress in the private fund sector to that of local public funds

David Gluckman

Managing Director

SANLAM UMBRELLA SOLUTIONS

13:00 Networking lunch for all delegates and speakers

14:00 EXPLORING THE NEW SOUTH AFRICAN GOVERNMENT PROPOSALS ON SOCIAL SECIRITY AND REFORM

Selwyn Johoma

Deputy Director General for Comprehensive Social Security

Department of Social Development

Session 5

Exploring Reform Experiences from the African Continent

15:00 RETIREMENT REFORM EXPERIENCES AND CHALLENGES FROM AN EAST AFRICAN PERSPECTIVE

• Evaluating the current status of Pension Fund Reform in East Africa
• The roles and success of the East African National Social Security Funds as found in Kenya, Uganda, Tanzania , Rwanda and Burundi
• How is the East African National Social Security Funds structured and currently impacting the social welfare of East Africa ?
• Providing success stories by investigating the imperatives that is contributing toward successful retirement industry reform in East Africa

Elizabeth Waiyaki

Pension Fund Specialist

EAST AFRICA

15: 30 PENSION REFORM IN ZAMBIA

• Detailing the current status and ongoing reformation strategies in progress
• Evaluating what the reform process to date has meant for the Zambian population
• What were the implementation challenges for change

Chris Kampamba

Chief Executive Officer

Alexander Forbes

ZAMBIA

16:00 Mid-Afternoon Refreshments

Session 6

The Role of the Trustee in Retirement

16:15 Trustees and REFORM: Discussing the elevating level of professionalism needed in Evaluating and benchmarking the duties and responsibilities of pension fund trustees

• Investigating proposals as to what should constitute fit and proper requirements of trustees, with specific reference to independent trustees, member elected trustees and sponsor appointed trustees
• What is the current status of trustee responsibilities and duties in Africa and how can it be benchmarked with those in 1st World Countries?
• Managing the changes affecting the position of pension fund trustees in the trading market
• The level of trustee training identified in Southern Africa
• How can trustees manage the balance of advantages and disadvantages in the transformation that have occurred in the pension fund industry
• Taking responsibility: How is African Pension Fund trustees responsibilities comparing to international standards

Nancy Andrews

Senior Legal Advisor

ALEXANDER FORBES

SOUTH AFRICA

17:00 Chairman’s Closing Remarks

Program Day 3

Interactive Separately Bookable Workshop:

Pension Fund Governance and Risk Management

Presented by: ICTS

Workshop Content:

Introduction

·Overall Course Outcome

·Organisation of the training manual

·Participate in the training now and manual later

Background of Governance Developments

·The Myners Review

·The second King Commission Report on Corporate Governance (King II)

·OECD Core Principles on Pension Fund Governance and Regulation

·National Treasury – Social Security and Retirement Reform (Second Discussion Paper)

·UK Fund Governance Survey 2007

Governance Failure - Case Studies

·International Governance Failure

·Local Governance Failure

PF130: Good Governance of Retirement Funds

·Duties of Trustees

·Governance by the Board

·Governance by the Board of the Operations of the Fund

·Management of Stakeholder Relationships

·Annexures to PF130

Risk Management

·Governance Risks

·Risk Relating to Board Composition

·Legal Risks

·Administration & Fund Operational Risks

·Financial Reporting Risks

·Investment Policy Statement

·Risk Benefits

·Distribution of Death Benefit Risks

·Communication

·Appointing & monitoring Services Providers

Workshop Agenda:

08:00 Registration and Early-Morning Refreshments

08:30 Welcoming Remarks & Session 1

10:15 Mid-Morning Refreshments

10:45 Session 2

12:30 Lunch

13:30 Session 3

14:45 Mid-Afternoon Refreshments

15:15 Session 4

16:30 Closing Remarks

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