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Category Retirement
SUB CATEGORIES Annuties |  General |  Savings & Investments | 

Retirement reform: changing role of fund advisers / trustees

02 October 2015 Michelle du Toit, Old Mutual
Michelle du Toit, Principal consultant at Old Mutual Corporate.

Michelle du Toit, Principal consultant at Old Mutual Corporate.

Additional requirements and responsibilities will be imposed on trustees of retirement funds in terms of the National Treasury’s recently published draft default regulations – which closed for comments 30 September. These regulations are part of the country’s broader Retirement Fund Reforms, and are likely to give further traction to the current industry trend towards large Umbrella Fund arrangements and Fund consolidation.

“The main aim of Retirement Fund Reform is to improve retirement outcomes for members, and these draft regulations take a positive step towards achieving this by requiring that all retirement funds implement a set of default options for members in terms of investment, an at-retirement annuity and preservation, as well as greater member support,” says Michelle du Toit, Principal consultant at Old Mutual Corporate. 

Du Toit says that while this is a positive development for members, it does create an -additional layer of responsibility for fund trustees, which may result in an acceleration in the shift from stand-alone funds to umbrella funds that have a professional board of Trustees.

“The draft regulations clarify the roles and responsibilities for fund trustees- in terms of selecting appropriate defaults, communicating these defaults to members, making them easily accessible, and providing counselling (paid for by the fund) to guide member decisions.

“International research, as well as Old Mutual Corporate’s experience, indicates that a significant number of members end up in funds’ default options. It is therefore critically important to ensure that these defaults are appropriate and in the best interests of all members who use them,” says du Toit.

We propose an interview with Michelle du Toit, Principal consultant at Old Mutual Corporate, who is keen to further discuss the following:

- Why the draft regulations place additional emphasis on investment defaults, and what this means for retirement fund Trustees and members
- Are these draft regulations referring to compulsory preservation, which has been spoken about in media?
- Why a significant number of retirement members end up in the default fund options, and why it is important to ensure that these defaults are appropriate
- Why she expects these draft regulations to further fuel the current industry trend which sees many stand-alone retirement funds transferring to large Umbrella Fund arrangements
- Why these regulations are positive for the industry, particularly the focus on the transparency, disclosure and the best interests of members
- Some of the positives / concerns around the draft regulations
- What are the next steps with these draft regulations

Quick Polls

QUESTION

The South African authorities are hard at work to ensure the country is removed from the global Financial Action Task Force grey-list by February or June 2025. What do you think about their ongoing efforts?

ANSWER

But what about the BRICS?
Compliance burden remains, grey-list or not.
End-2025 exit is too optimistic.
Grey-list is the new normal.
Too little, too late.
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