Sam Camerilli
For over half a decade the Natal Joint Municipal Pension/KwaZulu-Natal Joint Municipal Provident Funds (NJMPF), a KwaZulu-Natal retirement fund, has been successful in achieving numerous awards both locally and internationally.
The NJMPF has notched up a commendable list of awards in the industry, both locally and internationally with 21 South African and 11 international awards. The year 2016 was particularly good for the NJMPF having been acknowledged for excellence by the Institute of Retirement Funds Africa (IRFA) and the Council for Retirement Funds in South Africa (Batseta) as well as Africa Investor (Ai), Capital Finance International (CFI), The European, and the World Pension Summit Innovation Awards.
The CFI has also added accolades for 2017 in these categories; Best Corporate Governance, Pension Funds – (RSA), Best Practice, Pension Funds – (RSA) and Best Pension Fund Stakeholder Benefits – (RSA).
“This momentum continues, because we continually ask ourselves what’s next, which drives us forward and keeps us on track with our mission and obligation of providing superior retirement services.”
“The NJMPF’s drive, passion, strategic views and continued commitment to providing superior retirement service for stakeholders has allowed the fund to not only move forward, but maintain its award-winning momentum,” says Camilleri.
Through recent projects and campaigns, the NJMPF reveals how it continues to move forward.
Camilleri says executing good governance for the NJMPF is not based on a tick-box approach where parameters of good governance are reduced to compliance with statutory and legal requirements set out in the Pension Fund Act and other legislative authorities regulating retirement funds in South Africa, instead the NJMPF’s governance structure is built on a culture where ethical and astute behaviour is rooted in its DNA.
Evidence of this is that over the years the NJMPF has subscribed to the Institute of Directors for Southern Africa (IoDSA), which is the convener of the King Committee and the custodian of the King Reports that examine the levels of good corporate governance structures, policies and procedures for legally registered institutions in South Africa.
The NJMPF, for many years including the most recent assessment in 2016 by IoDSA, has been achieving an overall score of AAA, which is the highest notch achievable. This shows how the NJMPF continually perseveres in improving good governance within the organisation.
Camilleri informs that maintaining clean audit reports is another area of emphasis within the NJMPF.
“The Auditor-General of South Africa has a constitutional mandate and exists to strengthen accountability and governance in the public sector. The NJMPF has continued to achieve clean audit reports in an environment where clean audits are rare.
“Clean audits promote confidence and ensure stakeholders that their funds are administered in a proper and sustainable manner. This achievement is further evidence that the NJMPF continues to uphold its compliance requirements whilst maintaining its momentum.”
Camilleri says one of the fundamental obligations of a retirement fund is to ensure members and pensioners have inflation beating investment returns and monthly pensioner payments keep up with the inflation rate.
He reports that over recent years, the NJMPF has been able to sustain good investment returns for stakeholders. As an example, according to the NJMPF’s, actuary who is independent from the administration of the NJMPF, if you had invested R1-million with NJMPF (Provident Fund) in the year 2000, your investment earnings would have increased ninefold, to be worth more than R9-million (after costs) in the year 2016.
It does not stop there! Pensioners of the NJMPF are awarded increases and benefits which greatly improve their standard of living.
If the market performs well, NJMPF pensioners also receive ad-hoc bonuses or once-off special increases, the most recent being a special increase of 8.33% which was paid from January 2016.
Since July 2015, pensioners of the NJMPF have received monthly increases totalling 19.08%!
A significant project, which has been initiated by the NJMPF, is the alignment of its rules and regulations to new order legislation and the elimination of past discrimination.
“The rationalisation for updating the rules and regulations is aimed at improving and protecting stakeholders’ benefits,” says Camilleri.
“This is all part of the NJMPF’s strategy to continually move forward in enhancing the lives of its stakeholders.
“For example, unclaimed benefits are a big concern for retirement funds in South Africa. The South African Financial Services Board has reported that unclaimed benefits owed to some 3,5-million beneficiaries in retirement funds, had probably amounted to R35-billion.
Unclaimed benefits arise when a member resigns, retires or passes away leaving no contact details. Monies due cannot be paid until contact has been established with the member, widow, guardian or beneficiaries.
Camilleri says the NJMPF experiences difficulty locating members, especially since its membership is spread across KwaZulu-Natal, where members were previously employed at one of the 55 municipalities they service.
“The NJMPF has always considered the finding of members or dependants as important. As a result of a focused strategy to combat unclaimed benefits, the unclaimed value of benefits including accrued interest has reduced to R4-million, a mere 0.02% of the NJMPF’s total assets.
“The project continues with vigour as the NJMPF will not be satisfied until all members are traced and their benefits paid out.”
The NJMPF has improved its communication and interaction with stakeholders through information technology by introducing an interactive webpage that was developed around meeting the needs of its stakeholders.
Features on the webpage include being offered in more than one language (also in Zulu which is the language of the majority of members); training videos, financial literacy articles and tools; net replacement ratio and loan repayment calculators; instant access to pension certificates and benefit statements allowing stakeholders to have instant access anywhere and anytime.
“Soon the NJMPF will debut a cross-platform mobile application that will allow our members to have easy and direct access to information and benefits using their smart phones,” says Camilleri.
“Research conducted on smartphone usage reports that smartphone access in South Africa is growing rapidly and this is becoming a significant communication medium.
“Through its smartphone application, NJMPF aims to influence and motivate members to improve their financial provision for retirement and also encourage members to think about retirement planning daily.”
A dedicated client relationship team from the NJMPF visits members at 55 municipalities throughout the year, explaining the benefits of the fund and presenting financial literacy topics.
Workshops are held twice a year at the fund’s offices for municipal human resources and payroll staff to attend training, refreshers and launches of new services.
In an effort to enhance relations and open further communication with stakeholders, the NJMPF recently introduced a campaign to liaise directly with senior municipal officials (municipalities are employers to NJMPF members).
Camilleri says this activation is improving communication as information is reaching members from an additional channel.
“Roadshows for pensioners, beneficiaries and guardians have also been introduced recently by the NJMPF. The roadshows are designed to assist pensioners, beneficiaries and guardians who reside in remote locations easy access to the NJMPF, which then limits misunderstanding and enhances knowledge sharing in an endeavour to achieve better communication.
“During the roadshows, current and relevant information is shared; declaration forms, increases, tax certificates and news affecting the pensioners.
“The project is aimed at giving pensioners who reside in remote areas an opportunity to directly interact with the NJMPF’s delegation who conduct roadshows,” says Camilleri.