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As a central knowledge portal to the retirement and related industries, EBnet publishes a range of daily articles submitted by a range of industry organisations, experts and contributors. Readers can also comment on and contribute to articles.

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Directive PF No. 8 of 2018: Prohibition on the Acceptance of Gratification - The role and independen

Issued: 12 December 2019 1. PURPOSE 1.1 The purpose of this Communication is to inform the industry and stakeholders about the Financial Sector Conduct Authority’s (“the Authority”) approach to addressing the existing conflict of interest relating to principal officers appointed on boards of funds while also being employed by service providers. 2. BACKGROUND 2.1 Section 8(1) of the Pension Funds Act, 1956 (“PFA”) requires every fund to have a principal executive officer (“principal officer”). 2.2 The principal officer has a legal duty to protect the members of the fund by reporting to the Authority any matter that may prejudice the members of the fund. Such duty involves reporting the conduc

EBnet acquires Pensions World Magazine!

In an exciting development for the pensions industry in South and Southern Africa, EBnet has purchased Pensions World SA. Pensions World SA is a quarterly journal that includes articles from employee benefit practitioners throughout the spectrum of organisations in the pensions industry. This enablement further steps up the entire digitisation of the now combined Pension World / EBnet market presence to unrivalled levels in this unique segment to the benefit of our readers and advertisers alike and we are excited by the new opportunities this brings to the retirement industry and its stakeholders, says Chris Brits, CEO of EBnet. The format of the magazine will also be overhauled and updated

Light at the end of the section 37C tunnel

A long overdue rethink of section 37C of the Pension Funds Act is finally under way, following a request from the Deputy Registrar to the industry to give suggestions for amendments and submit them to the Financial Sector Conduct Authority (FSCA). It is hoped that the outcome will make decision-making relating to lump death benefits easier for trustees, and reduce the number of decisions challenged by the Pension Funds Adjudicator. The process has been marked by a unique collaboration of industry bodies, including Batseta, the Institute for Retirement Funds Africa (IRFA) and the Pension Lawyers Association (PLA), which asked their members for input and then consolidated comments. I was privi

SA Medical Schemes remain healthy despite a tough year, says Alexander Forbes Health

Alexander Forbes Health has published its latest edition of Diagnosis, an annual publication that analyses key trends in the medical schemes industry from 2000 to 2018. “The industry as a whole experienced a high claims ratio in 2018, with some of the largest schemes failing to break-even at an operational level,” says Roshan Bhana, Head Actuary at Alexander Forbes Health. Only 3 of the top 10 open medical schemes achieved an operating surplus, while the rest had to rely on investment income and in some cases reserves to cover claims and expenses. The open schemes industry generated an operating deficit of R1.33 billion in 2018, down from the operating surplus of R1.09 billion generated in t

What does history teach us about living annuities?

Retirement can be a daunting prospect. Not only is it a time of personal adjustment but it is also a time to make financial decisions that will impact your lifestyle for the rest of your life. Retired investors commonly face the dilemma of either maintaining a certain lifestyle or adjusting it in order to preserve their savings. Typically the more income one draws and spends today, the less is available to create future income. When inflation is added to this quandary, it becomes important to also grow that income over time to retain one’s buying power. Marriott has researched the sustainable levels of income that retirees were able to draw historically, to better understand the difficultie

Proper Retirement Benefits Counselling could change the lives of exiting employees

When an employee leaves their company, it is often an emotional event for everyone involved. As an employer, there’s the temptation to be less invested in an employee the minute a resignation letter arrives. With retrenchment, the unpleasantness of the situation can also cause immediate distance. But it is often in these instances that an employer has the chance to really change a life. When changing jobs, an employee has various options for preserving their retirement savings. If they make the wrong decision based on their personal circumstances, the opportunity cost could be significant. For employers, there’s an opportunity to make a meaningful difference to the individual’s financial f

Private Equity’s local leading ladies

Having been criticised in the past for being a disproportionately male-dominated profession, the South African private equity (PE) industry is experiencing a much-welcomed wave of accomplished female professionals rising through the ranks. Two such rising industry powerhouses are Polo Leteka, Executive Director and co-founder of IDF Capital, and Samantha Pokroy, founder and CEO of Sanari Capital, who both received Women Impact Awards at the 8th Annual Private Equity Awards Gala Dinner in London in October, which showcases their excellent standards in deal making on the continent. Upon accepting the special accolade, Leteka highlighted the need for establishing more women-owned-and-led PE fir

20 Tips to improve your finances in 2020

Use the new year as a chance to improve your financial health by adopting some resolutions around your finances. We’d all like to be healthier and wealthier, so cutting back on unnecessary expenses and saving or investing more are goals we should all be aiming for. Here are some steps on how to relook your finances: 1. Start the year with the end in mind. Decide what you want to achieve personally, physically and financially in 2020 and set daily, weekly and monthly goals aimed at your end goals. 2. Make a smart investment A book can be the most entertaining investment you make. Pick up one of the several great books available from local authors packed with great financial advice, tips, and

Old, Bold Pilots

‘Keep It Real’ - A Gryphon Op-Ed Series: Part 5 of 5 “There are old pilots, and there are bold pilots, but there are no old, bold pilots.” ~ E. Hamilton Lee, 1949 It’s hard to believe that commercial flight is an industry that’s just over a 100 years old. From Orville and Wilbur Wright’s “Wright Flyer” a host of airline and aviation-related industries have been spawned and today form an integral part of our lives. We travel with a nonchalant certainty, disgruntled when flights are delayed or landings are a bit rough. A flight landing at the wrong airport is the treated with disparagement and disbelief. But we always embark on any aeronautical journey with utter confidence that we will arrive

Living life to the fullest

While in South Africa a living will is not recognised in Law, the Law Commission does have living wills on their agenda for consideration. “A living will provides a family with an instruction to turn off life support machines, when there is no reasonable possibility of their loved one recovering,” says Willie Fourie, Head of Trusts and Estates at PSG Wealth. “Medical doctors determine whether there is a real prospect of recovery or not. The family is guided by medical personnel and makes the decision to end life support from there.” How a living will would play out A living will can play an important role and may help to prevent prolonged suffering for someone who is in a vegetative state.

Financially independent parents on the wish list this festive season

It’s the time of year again where South Africans nationwide swap work check lists for personal wish lists and the search for gifts becomes all-consuming. The festive season also presents a timely opportunity for pre-retirees and retirees to consider a more pragmatic approach to gift giving; namely to identify which gifts will give their children a smoother path in the years ahead. The gift of a financial legacy for loved ones has long been a priority for South African retirees when considering their retirement income options - the idea of leaving some financial support to their heirs after death. According to retirement income specialist Just, this is still the case. In their 2019 Retirem

Sanlam reports solid performance in 10-month operational update

Sanlam yesterday reported a solid operational performance in the 10 months to 31 October 2019 amid challenging operating conditions in the largest markets where the Group operates. Highlights for the four month-period since the end of June 2019 include continued strong net fund inflows at Sanlam Investment Group; improved traction in Glacier’s new business sales; as well as a marked improvement in Sanlam Corporate and Santam’s risk underwriting profits. Overall new business volumes increased by 6% and net result from financial services grew by 12%, contributing to a 16% rise in net operational earnings. Operating conditions remained challenging in South Africa with no improvement expected in

6 trends that will define the new decade

An investor’s journey has always been one of facing the unknown in the quest for sufficient reward in return for taking on risk – primarily defined as uncertainty. And increasingly, clarity about the future is becoming rare. As we prepare to enter the next decade we turn to trends that are already visible to understand where our ultimate direction and focus should lie. In our last message of the decade we offer you a sneak preview of the 20’s by looking at the key trends that will shape and define the local and global asset management industry. Alternatives and index trackers will take their place in portfolio construction Active management will have to continue to present its case against i

Myths, Mists and Mysteries

‘Keep It Real’ - A Gryphon Op-Ed Series: Part 4 of 5 There seems to have been a resurgence in the fascination with the mythological – movies like Lord of the Rings and Game of Thrones are testimony to this. In ancient Greece, stories about gods and goddesses, heroes and monsters were widely accepted as part of everyday life. Everything from being struck down by, and recovery from, illness to getting great seats for the circus (i.e. not being the main event in the arena) was attributed to them. They gave meaning to the world people saw around them. The purpose of this opening is to introduce the fourth of our five part series: ‘Keep It Real’. The series is an attempt to demystify the mythica

A better year - says Old Mutual Wealth

Believe it or not, but it is December already. Barring a surprise Christmas rally or a visit from the Market Grinch, we have a reasonably good idea what the calendar year returns for 2019 should be. On one level this doesn’t matter, since most investors’ financial horizons don’t neatly overlap with calendar years (unless, for instance, you retire on 31 December.) Still, humans like compartmentalising, and we also like looking back. December is the season for reflecting, after all. Bonds Let’s start with bonds. The All Bond Index returned 8% for the first 11 months of the year, ahead of cash, despite all the negativity. After all, this year has seen financial media saturated with articles on

ESG: tackling the big issues

It is always surprising how quickly attitudes change. When I was at university, cigarette companies produced sexy advertisements showing beautiful people skiing or sailing while smoking. Fast forward to 2019, and people smoking on the street are now frowned upon. In 2008, environmental, social and governance (ESG) issues were seen by many in financial markets as at best, a good marketing angle or at worst, a waste of time. Ten-odd years later, and conditions have shifted dramatically. The first phase of integration involved screening out prohibited stocks or sectors. Certain stocks or sectors (for example, arms manufacturers) were excluded from investment mandates. Over the last few years, a

We’re now playing in injury time

The quarter-on-quarter annualised GDP growth has come in weaker than expected. The market was looking to a decline of some -0.2%, with the print coming in somewhat worse at -0.6%. Another negative quarter shows us once again that the economy is not really going anywhere at this point. We had a very deep negative in the first quarter followed by a rebound in Q2, and now we have another negative growth rate. One could probably argue that although we don’t see a technical recession (in other words two consecutive quarters of negative growth), the economy is exhibiting the typical tell-tale signs of a low-growth trap and even possibly signs of a recession as well, although it is trying to break

Back to school financial check list

The arrival of the holiday season means that back to school also looms large, and now is a good time to re-examine your education budget and ready your finances. All parents want the best education for their children and the cost of schooling in South Africa is dependent on whether a child attends a public or a private school. Whatever your situation is, there are various ways to save towards your children’s education including: having a monthly budget, using your annual bonus and savings to pay fees upfront and investing in an education plan. The first tip to pay your children’s education is by working fees into your monthly budget if you are fortunate enough to have a set monthly income. I

Not all PE funds are equal, but they’re not all evil either

Private equity (PE) has evolved significantly since the high-leverage era of the 80’s, when financial engineering was the name of the game. While cases of over-gearing do still exist, lumping all PE funds together as “bad” would be a grave disservice to the many funds driving real economic growth and bringing about societal impact at a time when South Africa needs it most. This is according to Southern African Venture Capital and Private Equity Association, Tanya van Lill, who was speaking in response to a string of negative conversations that are currently headlining in the US press, blaming PE for massive job losses and calling for tougher regulations. “While we firmly agree that prudent b

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