Trustees who regard communication as a soft issue are in for a rude awakening, as members of retirement funds are asking more questions about their funds in the hope of enjoying financial freedom in retirement.
This is according to Anesh Soonder, the chief executive of the Institute of Retirement Funds (IRF).
Soonder was speaking at the IRF Communication Challenge, an annual competition aimed at promoting better communication between retirement funds and their members.
The competition, which is sponsored by Personal Finance and Liberty Life, also aims to provide constructive criticism to entrants and other funds to help them improve communication with their members.
Soonder says it is vital that funds communicate with their members. "Only through effective communication can members remain abreast of developments in their fund."
Soonder says this year the competition was also open to retirement funds that are not members of the IRF, and as a result there was a 100 percent increase in entries.
This year the competition categories were reduced to:
- Small Funds (1 to 500 members);
- Medium Funds (501 to 3 000 members);
- Large Funds (more than 3 000 members); and
- Umbrella Funds.
Soonder says that while the Communication Challenge encourages good communication, the legislation controlling compulsory communication with retirement fund members is causing confusion.
"It is clear that the current guidelines, as set out in the Pension Funds Act, are failing funds."
He says the IRF will be lobbying the Financial Services Board after holding countrywide workshops to canvass industry views.
"Unfortunately many people see communication as a soft issue that should only be considered once the more important issues, such as investments and legal problems, have been dealt with.
"Those who have this view are in for a rude awakening as members are asking more questions about their retirement funds in the hope of enjoying financial freedom in retirement.
"It is time for trustees to develop suitable long-term communication strategies that will effectively answer all questions and concerns raised by fund members," Soonder says.
All the winners:
Small funds:
1.Istores Retirement Fund
2.Steinmuller Group
Retirement Fund
3.JSE Pension Fund
Medium funds:
1.National Botanical
Institute Pension Fund
2.AST Retirement Scheme
3.Global Forest Products
Provident Fund
Large funds:
1.Government Institutions
Pension Fund (Namibia)
2.Eskom Pension
and Provident Fund
3.Iscor Selector Pension
and Provident Fund
3.Old Mutual Staff
Retirement Fund
Umbrella funds:
1.Cape Joint Retirement Fund
2.Cape Joint Pension Fund
3.Millenium Provident Fund