Constructive engagement crucial for retirement fund members

ACCORDING to ongoing global benchmarks, the primary imperative for retirement funds and industry service providers remains the focussed and constructive engagement with members, pensioners and stakeholders.

Findings from detailed research undertaken by the Institute of Retirement Funds Africa IRFA) into the practice of stakeholder engagement. This requires consistent and rigorous assessment and measurement of stakeholder perceptions, attitudes, and service needs. It also needs open and honest communication as well as financial reporting and member education practices. These should raise stakeholder awareness, strengthen trust and confidence in the industry, improve stakeholder understanding and influence stakeholder behaviour in terms retirement funding.

IRFA president, Wayne Hiller van Rensburg, says, "The research methodology developed for the Institute’s benchmarking and measurement processes is fully compliant with the FSB Circular PF130 as well as the King IV report on corporate governance. This is notably in the areas of ethical and responsible leadership, performance appraisal and risk management as well as addressing reasonable stakeholder needs, expectations and rights.

“And these include the right to be educated and informed when it comes to retirement funding and discretionary choice.” he emphasises.

IRFA has determined that the definition of stakeholders in the communication and engagement mix extends way beyond traditional definition.

He adds, “We found that stakeholders of best practices funds are defined as any person, group or organisation that has an interest or concern in the specific fund or industry. This means the playing field has widened considerably. Active and sustainable engagement with members, pensioners, service providers, organised labour and other interested parties has become mandatory.

“The study shows that collaboration between funds and service providers in communicating with members and pensioners and in delivering the service package a priority.”

Drilling down on the nature of this engagement, IRFA recommends the regular communication of fund benefits and services and the provision of accessible communication channels. It advises regular assessment of member understanding, behaviour and educational needs and the development and implementation of member education programmes.

Non-negotiable is communication in a language and style understandable and appropriate to all stakeholders. The crafting of communication messages and the provision of channels, accessible by all stakeholders, measurement of the effectiveness of stakeholder communication based on stakeholder understanding and behaviour and the communication of all environmental, social and governmental impacts of fund operation are also key.

So how does local industry rate itself against these best practice engagement processes?

He says there is work to be done, particularly in the field of measurement as well as in terms of member education. And concludes, “Overall compliance and best practices with regard to fund communication processes has been rated by local industry at 62,81 percent. High ratings to the variables in this battery are communicating in a cost effective manner, ensuring that stakeholder communication includes information on the operations, administration and investments of the fund and communicating consistently and transparently with all stakeholders with whom engagement is more than a moral obligation, it is necessary.