Research and benchmarking is a major focus
Responsible retirement planning practices stem from ‘rigorous and focused research’
The research and benchmarking process commenced by the Institute of Retirement Funds Africa (IRFA) in 2016 has been welcomed by the local retirement industry and is an area on which strong focus will be placed in future.
Last year saw IRFA release the results of its first two major research studies at its annual conference in Durban, and the launch of the next research initiative will be announced and workshopped at the next conference, to be held at the ICC from September 10 to 12.
IRFA president Wayne Hiller van Rensburg said that the provision of information and knowledge critical to sound business outcomes and the betterment of societal variables are key strategic objectives in service delivery to the industry: “Rigorous and focused research is the perfect platform to provide the retirement industry with the right information to make educated decisions.”
Hiller van Rensburg says the subject of the next IRFA research study will be a logical follow-through on the comprehensive research undertaken last year, and will focus on the members of the retirement fund itself, as well as the general public.
“Our first two studies focussed on retirement markets in South Africa in the area of social protection, and then the perceived compliance with local and international best practices in terms of fund governance, stakeholder engagement, investment practices, trustee development and financial reporting.”
The next logical step, according to the IRFA, is to track the perceptions and requirements of the employee and general public in terms of retirement provision and financial product needs, and check for synergy and inconsistencies.
Topline findings from the two studies to date certainly make for interesting reading.
The first study undertaken in 2016 summarised the published policies of four prominent bodies, issued between 2002 and 2015, in the area of social protection, with a focus on retirement provision. According to external researchers Rob Rusconi and Jonathan Mort, authors of Retirement Markets in South Africa’s Social Protection System Part 1: Developing Agreement on the Big Picture, there is a high degree of consistency across the views expressed by these bodies, summarised into these seven key themes:
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They say starting with the 2002 report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa and including the 2012 National Development Plan of the National Planning Commission, and policy papers or financial reviews issued by the department of social development and national treasury, this consistency relates to: the constitutional mandate to provide access to social protection and the obligation on government to meet this mandate; the requirement to consider social protection holistically; the role of the private sector, within the framework of government’s responsibility to contribute to the delivery of social protection; the regulatory weakness of the supervisory authority responsible for overseeing private provision of retirement saving; UIF JOFDJFODZ BOE PS XBTUFGVMOFTT of the structure or vehicles through which private sector retirement saving is achieved; the broad, deep inadequacy of outcomes for participants in private sector retirement provision; and the potential for objectives to be achieved through the progressive implementation of appropriate policies.
The second study undertaken by the IRFA research arm — cosponsored by the SABC Pension Fund, facilitated by the Financial Services Board and undertaken in consultation with research partOFS 4UFQIBOJF (SJUIT PG $PIFTJPO Communication, Research and Development — quantifies the industry’s rating of itself against core dimensions and variables, determined after an extensive literature search, both locally and internationally, into pension and governance best practices.
Hiller van Rensburg emphasises that “the research model for our best practices study was developed following an extensive literature search to determine best practices both locally and on an international scale”. He goes on to note, “Critical measurement dimensions of the research model are fully compliant with the FSB Circular PF130 as well as the recently released King IV report on corporate governance, notably in the areas of ethical and responsible leadership, performance appraisal and risk management as well as addressing reasonable stakeholder needs, expectations and rights.”
He goes on to say that the Best Practices Study has been expanded into a measurement tool, which will be used in ongoing evaluation of both the nature of best practices as well as perceived compliance with these in the African landscape. “We will again conduct the study early in 2018 to keep the industry informed in an increasingly dynamic landscape.”