Nathalie Burrows, Editor at EBnet
The first day of this year’s IRFA conference was abuzz with energy. From the bustling exhibition hall to the great content in the plenary and breakaway sessions. Colleagues reconnecting, important issues being debated and business being brokered.
My highlights were:
Governance & innovation in the modern retirement landscape
This was a panel discussion facilitated by Judge Dennis Davis (yes, the Dennis Davis). This discussion was held under three headings:
- Investing for impact
- Operational resilience
- Landscaping for future reforms
The Judge’s incisive questions were a breath of fresh air in an industry where we sometimes like to tip toe around the more difficult conversations. Whilst the panel, made up of IRFA representatives and the GEPF, acknowledged what is working, there was some frank conversation around what isn’t working (legacy systems, opaque communications). My highlight comment of the day comes from the Judge himself when interrogating both the willingness and the ability to position our industry for the future:
This is not an existential crisis. This is a financial crisis.
Social & infrastructure investment. Building communities through pension funds.
Lebo Mokgabudi (GEPF) set the scene for the rest of the day’s conversation in her presentation on this topic.
She sketched the scene with some profound stats of what the future will look like in Africa – particularly when it comes to the youth. By 2050, the influence of Africa’s youth will be unprecedented. Sobering indeed, considered in the light of aging infrastructure, high unemployment and education inadequacies. Her message was clear: we are no longer passive investors of assets. And supported this with the benefits, financial and social, of infrastructure investing.
Future-proofing retirement
Matthew Parks (COSATU) shared his views on how to improve the savings system and culture in SA:
- Flexibility – it’s not a one-size-fits-all
- Debt relief
- More incentives to save
The future is one where we customise products to address members’ real concerns. He urged that it’s time to be bold, creative and decisive.
Two-pot feedback
Feedback on two-pot claims and experience was shared by a couple of speakers.
Michelle Acton (Old Mutual) shared her insights into the Australian retirement system and how these lessons can be applied in the South African context. In an industry that 30 years ago looked pretty much like ours, Michelle sketched out the legislative and systems framework used to get them to the 4th best in the world – despite persistent high levels of poor financial literacy. My key takeout: we can communicate as much as we like, legislation is the most effective way to build this (auto-enrolment anyone?).
Guy Chennells (Discovery) dovetailed into the conversation with his “good news” story of two-pot: 6 out 10 South Africans did not take a savings pot withdrawal. He went further to present the profound impact that the two-pot system will have on savings for future generations of members – more than doubling net replacement ratios (even if they take savings pot withdrawals every year!) His call to action was clear: catch the member in the a-ha moment when they’re interacting with their funds.
Pension Funds Adjudicator feedback
Naheem Essop (Deputy Pension Funds Adjudicator) provided an overview of recent complaints and the learnings therefrom. You can catch these in their latest quarterly newsletter that was published overnight. Two things that stood out for me:
- The number of complaints submitted to the OPFA increased from 41 per day to 55 a day – an increase attributed to two-pot.
- Trustees should start getting their heads around being held personally liable for the non-payment of contributions by an employer.
That last one really does lend the Adjudicator’s weight to the regulatory framework around this ongoing problem – particularly in some sectors.
It’s so difficult to wrap up all the highlights into a short feedback piece like this. So please go catch some of our conversations from EBnet’s podcast booth at the conference under EBnet.Stream.
I’m looking forward to more great conversations today.
ENDS
