The importance of staying relevant - by Nathalie Burrows

R4.26 trillion. That is the value of assets in the retirement funds industry in South Africa. And every rand of that is under the custody and care of boards of trustees. Whilst there are some professional, independent trustees around, many trustees are average people, like you and me, with other day jobs.

R4.26 trillion.

When you pause for a moment and think about the responsibility of that, and the consequences of decisions on what portion to spend and where to invest the balance, perhaps an appreciation settles on the value of training.

The FSCA has recognised the importance of trustees having an understanding of retirement fund law by making the completion of the 22 modules of the Trustee Toolkit compulsory. This is a great and effective first step in preparing trustees for the decisions they will need to make regarding other peoples’ savings. But learning is an ongoing process, and whilst the Toolkit is a comprehensive foundation, many meeting discussions need a deeper practical knowledge of the issues in context or the products and services being procured. This is where ongoing learning is critical. And, let’s not forget, the Toolkit is not compulsory for Management Committees in umbrella funds – who mistakenly believe that they carry no responsibility.

The FSCA’s Conduct Standard 4 of 2020 acknowledges that the Toolkit is the minimum standard of skills and training for trustees. It is imperative that, if trustees are to fulfil their duties set out in the Pension Funds Act, regular training take place on gaps in their knowledge and skills. And I believe this responsibility extends to Management Committees too.

After all, would you trust a person to drive you around in your R4.26 trillion car with their soon to expire, minimum standard driver’s license?

By Nathalie Burrows, Editor EBnet.