The bank provides vital financial backing for green initiatives
The need for better retirement outcomes is crucial to the economic growth of Africa and for society as a whole
Influences that affect the retirement fund ecosystem will be in the spotlight
An ecosystem is a complex system of living organisms, their environment and all of their interrelationships in a particular unit of space
Upskilling is essential, and local industry rates IRFA’s contribution highly
Influences that affect the retirement fund ecosystem will be in the spotlight
Franklin Templeton Investments has 40 offshore collective investment schemes registered with the South African Financial Services Board. Michael King, Franklin Templeton director for Africa, says the group offers a range of investment opportunities to South African investors, available through the foreign exchange offshore allowance.
In mid-2004 Sanlam Multi-Manager International restructured its international offering to its South African clients by applying its process to its new global equity and global bond products. Previously SMMI operated on a regional basis, finding the best investment managers in each geographic area to manage its assets.
Financial planning varies from person to person — the individual who has more money than he or she knows what to do with clearly has a different financial planning problem from the person who’s been living beyond his means for the past 12 months.
For many years we have waited for Finance Minister Trevor Manuel to announce further investment exchange control relaxation in the annual national budget, only to have our hopes dashed. Thabo Khojane, MD of Investec Asset Management in South Africa, speaks to Eamonn Ryan.
The United Kingdom commercial property sector has gone through a signiÂÂficant slump in the past year with capital values falling an average of 15% since June last year, reports investment broker at Broll Property Group, David Adams. This market, says Adams, provides an excellent opportunity for South Africans to use offshore allowances or asset swaps to create offshore assets with the UK property pricing.
Offshore financial markets look a sorry sight at the moment with stock markets across Europe down 15% on average compared to their value eight years ago. Some properties in the US are more than 60% cheaper than a few years ago. But what this means for the investor with an appetite for risk is opportunity.
One of the major questions facing global investors is: What will happen in the US economy? According to Paul Hansen, group director for retail investing at Stanlib, the United States Federal Reserve Bank has taken aggressive corrective action that should stimulate the economy by the second half of 2008.
International assignment is booming as business globalises: not only are South African companies importing and exporting skills, but they’re also transferring them between foreign countries. Multinationals have operated like this for decades, but it’s a relatively new phenomenon in South Africa. The local market is rather small by international standards.
Corallie Pringle, managing director of Corporate Relocations, lists the services that clients should expect from their relocations firm. Among them is the arrival services for inbound expatriates: pre-assignmentÂÂ/look-see orientations; home-finding programmes; school search and educational consultancy; settling-in services; domestic help; obtaining goods and services; coordinating of specialist services and, in many instances, paying the service providers on behalf of the client company; linking spouse/partner to international and local support groups.
The single major prerequisite needed to be a player in the relocations industry is a global reputation. It’s easier for someone who has a global reputation to get into the industry, than it is for someone who doesn’t. For instance, estate agents previously tried to expand into relocations, but failed because of a lack of skills in tax and immigration.
The Department of Home Affairs issues about 18 000 work permits each year, of which roughly half are for expatriates, with the other half being issued to small firms for the importation of scarce skills and to Zimbabweans. Because of the massive increase in infrastructure development in South Africa, the number of expatriates entering the county has sharply increased.
Setting an expatriate’s remuneration is far more complex than a local salary because it has to be benchmarked against different currencies, salary levels and costs of living — and also has to incentivise the expatriate to leave the comforts of their home to take up the international assignment.
Tax is one of the most important features of any expatriate contract because of the interaction of various tax jurisdictions. Being a financial issue, companies are alert to ensure their employees do not become liable for tax in two jurisdictions. For tax purposes, a person is regarded as a South African resident if he or she physically resides in the country for an unbroken period of more than 91 days in the current year.
A growing trend is for small business to outsource their human resources function, including payroll — down to domestic staff. Thus Paxsal Business Process Outsourcing (BPO), a member of the Kelly Group, has introduced a micro-payroll product tailored to small businesses with up to 50 employees.
There has long been an argument relating to integration, between best- of-breed products and pre-integrated systems, for which one size fits all. The lines are blurring and today you do not have to opt for best of breed or pre-integration — but the argument hasn’t died.
The 50-year-old Pension Funds Act is today a hodge-podge of amendments, guidance notes and interpretations, long in need of consolidation. Reform has been under way several years already and is unlikely to be resolved before 2010. The national treasury in 2006 released a discussion paper on retirement fund reform with wide-ranging proposals on all aspects of retirement savings.
The functions of payroll administration and human resources (HR) departments are merging as the original barriers between the two fall away and payroll software undergoes radical development to cater for ever-changing legislative demands. Grant Lloyd, managing director of payroll software developer Softline Pastel Payroll, says there are five major payroll laws that govern payroll processing and these place immense pressure on payroll administration and HR departments.
According to figures, 35% of all insurance claims have a fraudulent element. This equates to millions of rands lost every year. Denis Ternent, Glenrand MIB executive general manager, broking services, says: "White collar fraud continues unabated — South Africa probably has the highest incidence of fraud in the world."
Following a landmark decision by the Supreme Court, short-term insurers will be permitted to design and sell medical cover. Since 1998 this market has been all but barred from selling medical cover because of an interpretation of the definition of "business of a medical scheme" by the Council of Medical Schemes.
Foreign interest in the South African short-term insurance market, especially the corporate sector, is very active. Chicago-based Aon Corporation bought a stake in local brokerage Lumleys more than a decade ago, the Willis Group took a stake in Mark Floyd and Associates, as did Marsh in CT Bowring.
The amount that people are paying to service their debt has risen to an all-time high of 80% of disposable income, according to figures recently released by the South African Reserve Bank. Ian Wason, MD of Bond Busters, attributes much of this to the lengthy introduction of the National Credit Act.
About 60% to 70% of the South African home finance market is now facilitated by originators, who have managed to secure interest rate concessions of 1% to 2,5% for their clients. They handle the shopping around for you, as well as the administration and insurance.
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/ 4 November 2005
The final version of the first phase of the codes of good practice for black economic empowerment address a few contentious issues, but leave many questions unanswered. The codes clarify concerns around the measurement of bonus points, the issue of whether pension funds’ indirect equity holdings count as empowerment, and the so-called flow-through principle.