The trustees of your retirement fund will soon have a code of conduct to guide them to act in the best interests of retirement fund members.
The board of management of your retirement fund is responsible for managing your fund in terms of current legislation, common law and the rules of your fund. It is also responsible for ensuring that all fund contributions are received on time and that the money is invested properly in order to safeguard the assets of the fund to ensure that you can receive benefits when they become due to you, for example, should you be retrenched, leave the fund or retire.
According to a draft code of conduct for trustees circulated by the Financial Services Board (FSB) for comment, trustees should disclose adequate and relevant information to fund members and other beneficiaries. The trustees have to act with due diligence, care and good faith in the safe custody, control and administration of your retirement fund.
Your trustees should avoid taking advantage of their positions to enrich themselves at the expense of the fund. If such a conflict of interest arises, it must be disclosed to the other board members and the interest should be entered into a register.
Your trustees must protect and serve the interests of all the stakeholders of a fund impartially. These stakeholders are the active fund members, pensioners, deferred pensioners and beneficiaries. No individual or group of members may be given preferential treatment over another.
The draft code states that the law does not prescribe any criteria for being elected or appointed as a trustee. Boards are left to establish their own requirements for trustees. Because trustees are responsible for the financial management and administration of trust property, they should be people with integrity.
Your board of management is entitled to obtain expert advice from professionals such as lawyers, actuaries and auditors. However, the board remains accountable for decisions taken on the basis of the advice. Where duties such as the administration and investments of your fund have been delegated, the trustees remain accountable for the proper execution of these duties.
To comment on the draft code, send a fax to Alta Marais at the FSB on (012) 347 8787 or email [email protected]
The deadline for comment is December 20, 2002.
The FSB hopes to have a code in place by the end of the first quarter of next year.