The Institute of Retirement Funds Africa (IRFA) is celebrating three decades of working together with retirement industry stakeholders to achieve consistent improvement for the beneficiaries of South African pension and provident funds.
“The biggest contribution that we’ve made is in the area of interpreting and assisting many of the regulatory bodies in formulating processes and policies that are positive for the development of the retirement sector,” says Wayne Hiller van Rensburg, president and chairperson of IRFA.
“The IRFA has been very successful in interacting at a professional level with regulators and policy makers, which results in information being aggregated, interpreted and translated into training material for industry role players.
“This is evident by attendance at our conferences, workshops and seminars. Delegates at our functions benefit from cutting-edge information interpretation. They are able to return to their organisations and pass on the essence of the issues and essential elements that need to be implemented.”
Hiller van Rensburg says two of the biggest strengths of the IRFA are its diversity and that members give freely of their skills and knowledge.
“The IRFA is structured around a small central administrative and co-ordinating office, while the gathering and aggregating of information [is] done through our committees, which are made-up of volunteers from the retirement fund industry.
“This provides us with a diverse and knowledgeable skills base that ranges from legal to actuarial, fiduciary, tax and business skills, creating a space in which all the voices are heard.
“The outcomes of what the committees produce incorporate the different perspectives in a form that is practically applicable and ensures that the members of the retirement funds are the ultimate winners.”
Historically the pension industry has been controlled by employers and service providers, but from 1996, with the introduction of member-elected trustees, members of pension funds have had far more input regarding the development of the industry, according to Hiller van Rensburg.
“The IRFA’s growth has been positively influenced by member trustee participation, in the sense of being able to represent and incorporate voices from across all aspects of the retirement industry.
“This input from people who are not necessarily full-time pension industry professionals has seen both the organisation and the industry grow and develop, through their participation in committees and providing feedback to regulators and policymakers, which has been exciting.”
Hiller van Rensburg says something else the IRFA is increasingly becoming involved in is qualification or certification for retirement fund trustees.
“We are actively working with the Financial Services Board (FSB) to develop the course material and ensure that the environment in which the material is presented is conducive for learning.
“We believe that it is important to formalise the fiduciary knowledge that people acquire.
“Many fund fiduciaries, especially trustees and principal officers, are not full-time employees, with the result that they might not have the levels of education or qualifications necessary to have acquired the governance skills or pensions industry knowledge necessary to work towards the best outcomes for the people they represent.
“We want to make sure the correct training and skills development is available so that all fund fiduciaries have the minimum standard necessary, and that there is some form of certification that substantiates this.
“However, this must be balanced with the democratisation of the pensions environment and having broad representation of stakeholders in the industry.”
The IRFA has also tightened up on governance and was incorporated as a not-for-profit company in line with the Companies Act regulations, which has clarified and enhanced the way it functions. The organisation was previously an association.
“We have also become more outward focused. We see the role of our central office as one of co-ordination and enhancing the operations of the organisation’s committees, to which members volunteer their time and expertise.
“For example, our legal and technical committee is pretty much the brains trust of South African pensions law. When laws and regulations are drafted, our comments are very often incorporated … and the corrections we suggest are regularly integrated as well.
“We recognise the need to use the broad range of expertise of our members for the development of the industry,” says Hiller van Rensburg.
He says the most important requirement in the industry is the constitutional imperative of the state to create an environment that allows all social players to contribute to adequate social benefits for all South Africans.
“This is a theme that all stakeholders are working towards, and one which IRFA is focused on. Although we represent retirement funds and their members, we understand that it is not enough to provide for our society as a whole.
“Likewise, we recognise the need to create sustainable investments that deliver long-term wealth without harming the environment and that are socially responsible.
“In the South African context this means ensuring that the entire value chain and range of service providers are representative of our country’s demographics.
“Social protection and transformation are big issues, in the sense of the industry becoming more representative and inclusive, and having investments that are not destructive to people or the natural environment,” says Hiller van Rensburg.
What members appreciate most from the institute, besides its policy work, is the advice and guidance provided on the complexities of the law, as well as the knowledge and skills development offered with regard to corporate governance.
The IRFA has recently gone through a rebranding, with its new corporate identity to be rolled out over the next few months, reflecting the institute’s focus on expansion into the rest of Africa and further afield.
“Our logo has changed from the infinity sign to incorporate the African continent, which reflects our expanded focus on the industry throughout Africa, and our increasing emphasis on dialogue and communication with our peers across the continent,” concludes Hiller van Rensburg.
Promoting positive retirement industry reformation
The IRFA’s focus has always been to promote the active involvement of members of pension and provident funds by way of workshops, conferences and seminars, according to IRFA board member Professor Voet du Plessis, who is also a past president of the organisation and has been involved with the institute for most of its 30 years of existence.
“We have always campaigned for the members of funds to have more input into the affairs of their own funds. After we made representations to the Mouton Committee, the Pensions Fund Act was changed to make it possible for members of a pension or provident fund to elect from their own numbers at least 50% of the board of the fund,” says Du Plessis.
“Another area in which the IRFA has made a big contribution is to encourage its members to change their behaviour in line with new regulations and legislation through education, training and rewarding best practice through our awards.
“Our Best Practices Industry Awards (BPIA) have, since their initiation, motivated a culture of rewarding excellence in fund performance.
“We encourage the retirement industry to evaluate, review and upgrade all their funds’ processes, which in turn creates a greater understanding and awareness of the value of the retirement funds in South Africa.
“The intention of the awards has always been to recognise the professionalism of industry players across a broad range of activities, which is reflected in the award categories: Stakeholder Communications, Financial Reporting (annual reports), Legal and Technical Compliance, Trustee Development, and Investment Performance.
“The promotion of boards communicating with their members has made a big difference in transforming the industry,” says Du Plessis. “The IRFA’s aim is to ensure the retirement industry is at the centre of development and transformation of the country.”
Du Plessis says IRFA’s legal and technical committee has also made a big impact on transformation in the industry.
“The committee examines the impact that changes in legislation or regulations will have on the industry and what we can do better as an industry.
“The committee, which benefits from the expertise of a broad spectrum of industry stakeholders including legal, financial, tax, and actuarial, communicates closely with the Financial Services Board (FSB), National Treasury and the South African Revenue Services.
“While the IRFA’s representation of the retirement industry in negotiations with government authorities and the FSB is one of the most important benefits for the institute’s members and the industry as a whole, its promotion of skills development and training and its focus on improving communication within the sector cannot be underestimated,” concludes Du Plessis.