Survey on Effective management of SA Retirement Funds

The March 2007 PwC report represents the responses of 110 chairpersons from a wide spread of retirement funds from very large to fairly small with assets totalling over R80 billion.

The survey also compares the South African survey results with an equivalent PwC survey completed in the UK a year ago.

Key survey findings

• In general, funds are managed in accordance with the specific rules of the funds as well as with applicable legislation. Most trustee boards believe that they are up to date with all legislative requirements, but most of them indicate that they have not assessed compliance with the King II principles of corporate governance.

• Although most funds are aware of the importance of good governance, only a third have a formal governance mandate that is used for steering management processes and decision making.

• Only 14% of funds have not considered conflicts of interest. However, only 15% have a formal policy in place to identify conflicts. 75% of funds with assets under R500 million each have not considered a process for managing conflicts of interest.

• Although 85% of funds have considered the performance assessment of their advisers, the process of assessment can be improved. 37% of funds assess performance of advisers on an ad hoc basis only that is not standardised. 9% of funds do not assess their advisers at all. 55% of advisers are selected either on criteria that are subjective, or after informal debate and without any review.

• The survey also shows that on the management of defined contribution funds, SA funds are well advanced. They give considerable thought to the range of investment options they offer members. They also put considerable effort into communicating the risk/return relationships taking into account members’ risk profiles

Download the Survey