NMG, INfund to provide independent retirement benefit counselling

Siphamandla Buthelezi at NMG Benefits

Siyabongi Maki at INfund Solutions

Employee benefits firm NMG Benefits has launched a partnership with INfund Solutions, the largest independent provider of retirement benefit counselling (RBC) in South Africa, to provide objective and unbiased counselling to fund members.

INfund and NMG will work with retirement funds to structure annuity and preservation options (both within the fund and out-of-fund) to ensure that these are priced at institutional rates, and in the best interest of members, says INfund managing director, Siyabongi Maki. RBC will then be provided to educate members on their choices.

Since March 2019, retirement funds in South Africa have been required to provide RBC to retiring or exiting members on the various choices available to them. Funds must also provide default preservation and annuity options, which can be with an external product provider or within the fund itself.

Although these rules were designed with good intent, the reality has seen many funds choose to receive RBC from large financial institutions at no cost, says NMG’s Head of Platforms, Siphamandla Buthelezi. As a result, exiting members are often encouraged to purchase retail annuity products carrying high fees or commissions and not selecting the fund’s more cost-effective annuity option. Early intervention has been shown to result in more members making better informed decisions when leaving the fund.

“Our partnership with INfund will address this issue effectively by providing independent advice, and securing wholesale asset management and other charges for the individual members,” said Buthelezi.

INfund MD Maki said the partnership would benefit thousands of retirees by providing a wider range of options at a lower cost. “We’ve seen how even small differences in fees can have a significant erosion effect on a member’s retirement capital. We look forward to working with NMG to build and implement default products with much lower fees to members,” he said.

NMG Benefits focuses on employee benefits such as healthcare consulting, retirement fund consulting, retirement fund administration, investment consulting and actuarial consulting. It has more than R150 billion in assets under management for more than 250 000 pension fund members in Southern Africa. Both NMG and INfund are Level 1 B-BBEE contributors.