Trustees have the sole responsibility for ensuring good governance in retirement funds and they can only feel comfortable with their responsibility if they have been adequately trained.
Stella Seletse, an executive consultant at Old Mutual Actuaries & Consultants and the head of the Old Mutual Trustee Education Programme, says a Deloitte and Touche survey in 2001 found that only 24 percent of South African retirement funds provided formal training for trustees.
Another survey, by Naledi, a research unit that has close affiliations with trade unions, found that there was a distinct absence of training for trustees who are employees.
Since 1994 there have been significant changes in the retirement fund environment, Seletse says.
Owing to socio-political changes, amendments to the Pension Funds Act and other legislative changes, and the shift from defined benefit to defined contribution funds, trustees have ever-greater responsibilities.
Seletse says the training of retirement fund trustees can only be effective if the needs of trustees are first analysed and then followed up with customised training that meets those needs.
Seletse advises that a trustee training audit be done in which trustees are asked to gauge their knowledge using a checklist.
The checklist would highlight individual needs and existing strengths, and would enable training that is compatible with these needs.
The retirement fund industry should then provide training at different levels.
Seletse also called on employers to give trustees who are company employees adequate time off to attend training courses.
In the United Kingdom, companies have a legal obligation to give trustees the time to be trained and Seletse suggested that perhaps the Financial Services Board should consider taking a similar step in South Africa.
Trustees are responsible for millions, if not billions, of rands worth of pension fund assets and it has been realised that there is a need for standardised trustee education.
Seletse says that various institutions are looking into whether there should be certification for trustees and at what level it should be pegged.