Fast, fair resolution for IF and Dynam-ique Retirement Funds
Voluntary liquidation of IF and Dynam-ique Retirement Funds presents a fast and fair resolution for all stakeholders.
Francois Rosslee of ARGEN Actuarial Solutions, one of the largest independent actuarial firms in Africa specialising in pension fund valuations, has been nominated as the proposed liquidator of the IF and Dynam-ique Retirement Funds.
Following the resignation of the funds’ administrator, AON South Africa (Pty) Ltd, a suitable new administrator could not be appointed. Through extensive consultation, the Trustees have identified the most appropriate approach towards the winding up of these funds with the objective to ensure a fast and fair resolution for all stakeholders. The Trustees therefore have prioritised the completion of the funds’ re-build; the finalisation of outstanding statutory affairs; and ensuring that all funds are 100% funded; before finally terminating the four funds by way of a voluntary liquidation in terms of Section 28 of the Pension Funds Act.
“The word ‘liquidation’ is merely the term used for this normal manner of winding up a fund,” notes Rosslee. “It does not imply that the funds are in financial difficulty, as it generally would in the case when a company is placed in liquidation. On the contrary, in the context of retirement funds, voluntary liquidation is a thoroughly regulated process to ensure the equitable distribution to all stakeholders while protecting everybody’s interests in a fund.”
Rosslee explains that liquidation follows a regulated process, specifically designed so that all claims against the fund can be formally logged, considered and addressed in a fair and equitable manner as at a specific date. “The liquidation process involves open, transparent disclosure and a defined public engagement procedure including, for example, preliminary accounts and advertising to allow for public objections. It is the option that offers employers, beneficiaries and fund trustees the best protection against long-tail risks and liabilities, while ensuring good governance and solid risk mitigation.”
While there is a general perception that liquidation is an extremely lengthy and cumbersome process, this is not necessarily the case if a fund’s affairs are in order before the fund is placed in liquidation. “The anticipated timelines for the liquidation process, in this instance, are not expected to be substantially different from the expected timelines to conclude, for example, a series of transfers,” notes Rosslee. “Of course, there will be a period during which all normal exit benefits will be pended. However, it is our priority to ensure that no payments are unnecessarily caught up in the liquidation due to administrative delays and that the liquidation period is kept as short as possible. The payment of liquidation benefits is expected to be spread over the first three quarters of 2016.”
To ensure all stakeholders have access to a single point of contact for all four funds, a call centre will be established by ARGEN Actuarial Solutions, which has built up extensive experience through its involvement in a large number of fund deregistrations and fund liquidations. “We are confident that the Trustees of the IF and Dynam-ique Retirement Funds have identified the most appropriate approach towards the winding up of these funds, and that the thorough, transparent and regulated liquidation process will not only ensure a fast and fair resolution for all stakeholders, but also protect employers, beneficiaries and fund trustees against long-tail risks and liabilities,” concludes Rosslee.
