Programme aims to improve performance

IRFA vice president, Geraldine Fowler

IRFA vice president, Geraldine Fowler

The Institute of Retirement Funds Africa (IRFA) industry awards and recognition programme has evolved considerably since its initial inception as a “Communication Challenge” 31 years ago. It is now a robust and respected method of identifying and promoting best practices and standards in retirement fund governance, transformation, investment practices, stakeholder engagement, trustee development and financial management and reporting, according to Wayne Hiller van Rensburg, IRFA president.

He says the IRFA established the Best Practice Industry Awards to encourage the boards of retirement funds to continuously strive to improve the performance of those funds and to celebrate excellence in the performance of funds in relation to particular categories of their conduct of fund business.

“The programme attracts entrants from a wide range of retirement funds and is benchmarked extensively against local, regional and international programmes of this nature. One of the core objectives of the programme is to identify those practices which should set the standard for the sector.

“The IRFA believes that by bringing these into the public domain we are promoting good practices and the body of knowledge for the ultimate benefit of the members of the retirement funds and service providers. The objective of the programme has never been commercial, and our judges and moderators volunteer their time and expertise at no cost.

“For many years we have collaborated with regulators and they have been core partners in terms of lending guidance and judging expertise, which has enabled us to develop an inclusive programme; and entries continue to show learnings and practices surfaced by our awards programme,” says Hiller van Rensburg.

IRFA vice president, Geraldine Fowler, agrees with Hiller van Rensburg, saying that the awards programme provides a mechanism for extremely rigorous peer group evaluation and a way to test individual standards and practices against industry benchmarks.

“Through the learnings gained, both by individual entrants and the industry in general, the awards programme contributes towards sound governance and engagement, to the ultimate benefit of the members of retirement funds throughout the continent,” says Fowler.

“We believe it is our mandate to surface and acknowledge high standards and best practices for the benefit of industry at large. Learning, growth, knowledge and evaluation are important drivers of IRFA strategy and service.

“This year we have added an overarching category to the line-up, which is the ‘Gold Standard’, to acknowledge entrants who meet and exceed best practices in the six class categories. By definition, the highest scoring entry in this category is the overall winner in the programme, while the highest scoring entry in the class categories will receive acknowledgement for ‘best in class’.

“We have also streamlined both the judging programme and the costs involved — IRFA is a not-for-profit after all — by introducing an internationally recognised online entry and judging programme. This has proved highly effective and has enabled us to include judges from across the continent and the international arena,” says Fowler.

Hiller van Rensburg points out that participation in the Best Practice Industry Awards requires a fund to subject its performance to self-assessment, and stimulates learning and creativity that engages in the conduct on which the fund’s performance will be assessed for the purposes of the programme.

He contends that it should also enhance member confidence in the board of a fund, because it demonstrates the board’s willingness to subject aspects of the fund’s conduct of business to independent evaluation.

Regulatory environment needs to enhance and protect benefits

Wayne Hiller van Rensburg, president of the Institute of Retirement Funds Africa

Wayne Hiller van Rensburg, IRFA president, says the ANC’s 2019 election manifesto talks to prescribed assets in two broad sections: “Investing in the economy for inclusive growth”, where reference is made to prescribed assets; and “infrastructure development”.

He explains that the election manifesto endorses infrastructure development by means of a social compact between all societal role players that will include: business and investors as sources of capital; a state-sponsored and developed infrastructure fund, which will in all likelihood share features of government bonds; and a sovereign wealth fund.

“Specific reference is made to prescribed assets in a section entitled ‘Transform & Diversify the Financial Sector’. Here the document says: ‘Investigate the introduction of prescribed assets on financial institutions’ funds to mobilise funds within a regulatory framework for socially productive investments (including housing, infrastructure for social and economic development and township and village economy) and job creation while considering the risk profiles of the affected entities.’

“In this context institutions are likely to include pension funds as well as insurance companies, and possibly investments that fall under the Collective Investment Schemes Act.”

Hiller van Rensburg believes the document promotes two policy objectives: inclusive growth that ultimately leads to a more equal society, which is hopefully also wealthier; and fostering more equitable outcomes with a specific focus on places in South Africa and sectors of the economy where it is difficult to attract capital.

He contends that whether the reintroduction of prescribed assets will achieve the objective of a more equitable society that is also wealthier will ultimately depend on the details of implementation. However, he emphasises that the IRFA is a non-political organisation and its views will be formulated accordingly.

“As an advocacy group with a specific focus on ensuring the best possible outcomes for people’s retirement income, we would evaluate the ultimate policy on how it impacts on this,” says Hiller van Rensburg.

“The IRFA would support any effort that improves the lives of all who live in South Africa. We would, however, focus on whether a policy tool such as prescribed assets is the most effective mechanism.

“Other solutions may exist. We already have impact investing, various forms of co-investing where pension funds from across the globe invest in infrastructure projects (a recent project of this nature was concluded in Kenya) and other investments outside the capital markets, which aim to achieve similar outcomes.

“This needs further investigation and a better understanding of how the ANC’s election manifesto policy objectives can inform this conversation.

“At the end of the day, every person saving towards or receiving a pension needs to know that the regulatory environment is there to enhance and protect benefits, which is the reason we at the IRFA engage on these issues on behalf of our members and ultimately for all pension funds’ members,” says Hiller van Rensburg.