FUND OVERVIEW AND GOVERNANCE
This section deals with the overview and governance of the fund.
Fund Overview and Governance Menu
Just as a company needs directors to run it, so a Retirement Fund needs Trustees to run it. The Trustees’ duties are similar to those of a company’s board of directors – they hold a position of trust, with their duties centring around protecting the interests of the Fund’s members.
The Board of Trustees governs the Fund. In this section you can find out more about:
- Who the Trustees are, what their responsibility is, and how they are chosen.
- The Sub-committees of the Board.
- Who the statutory officer-bearers of the Fund are.
How the Trustees are elected and appointed
The Fund has 16 Trustees, 14 of whom are chosen by the members and 2 of whom are appointed by the Minister of Finance. All Trustees also have alternates, so that there are 14 alternate member Trustees and 2 alternate employer Trustees.
Each of the nine Provincial Legislatures chooses one member Trustee (and his or her alternate), and five member Trustees are chosen to represent Parliament – two are chosen by the members of the majority party in the National Assembly, two by members of the minority parties, and there is one chosen by members of the NCOP.
Although the Minister only appoints two employer Trustees, each of these has 7 votes when the Trustees have to decide on a matter by voting, so that the employer Trustees together have the same number of votes as all the member Trustees do. The employer Trustees are therefore very important in the management of the Fund.
Even though Trustees are chosen or appointed by a “constituency”, each of the Trustees has a legal and fiduciary responsibility to act in the best interests of the Fund and all of its members – the Trustees may not put the interests of any particular stakeholder group ahead of the interests of the Fund and its overall membership.
When a Trustee is temporarily unable to act as such (e.g. is unable to attend a Trustee meeting), his or her alternate Trustee can act in his or her place.
Member Trustees must be chosen within six months of a national Election, and in the same period the Minister must appoint (or re-appoint) the employer Trustees. The current Trustees will hold office until the time of the next Election. The names of the current Trustees are given in the introductory section of this site.
Meetings of the Board of Trustees usually occur four times per year.
The duties of the Trustees
The Trustees have a fiduciary duty to act in the best interests of the Fund and in a way that is consistent with the Fund’s Rules and with the Pension Funds Act.
Importantly, this means that in making decisions the Trustees must consider the best interests of the Fund and its whole membership, and not the interests of any particular stakeholder group.
SUB-COMMITTEES OF THE BOARD OF TRUSTEES
The Fund currently has the following standing sub-committees:
- Death Claims Committee
- Investment Committee
- Governance , Audit and Risk Committee
- Management Committee
The sub-committees usually only have the power to make recommendations to the full Board of Trustees, although in some circumstances the Trustees may delegate decision-making authority to one of the sub-committees (such as the Management Committee).
The Death Claims Committee meets regularly to consider how to allocate the benefits payable on the death of a Fund member, in line with the requirements of section 37C of the Pension Funds Act, and makes appropriate recommendations to the Board, after considering reports submitted by the investigating officer (who will usually be one of the Trustees who is mandated by the Board to interview the family and friends of the late member).
The Investment Committee meets regularly to consider matters relating to the investment of the Fund’s assets, such as reviewing the investment strategy and investment performance of the Fund and the choice of investment managers used by the Fund.
The Governance, Audit and Risk Committee meets regularly to consider matters relating to the sound governance of the Fund as well as to brief the Fund’s independent auditors.
With regard to governance, its role is to ensure that the Fund complies fully with the governance standards required by the Pension Funds Act – these are largely set out by the Registrar of Pension Funds in a circular to the retirement fund industry, PF Circular number 130. The committee also deals with risk management
The committee also receives the auditors’ initial report on their findings. The auditors’ report together with the annual financial statements of the Fund, are brought by this committee to the full Board for consideration.
The Management Committee meets regularly in order to make urgent interim decisions on behalf of the Board of Trustees, where so mandated by the Trustees, or to deal with other urgent matters.
The Pension Funds Act requires the Trustees to appoint certain key service providers to hold offices that are designated in the Act. The current office-bearers of the Fund are:
- Principal Officer: Mr Sizwe Nyenyiso (an official of the parliamentary staff) (awaiting approval by the FSCA)
- Actuary: Mr Ranti Mothapo, Moruba Consultants & Actuaries
- Consultant: Dr Erich Potgieter, Willis Towers Watson
- Administrators: Alexander Forbes Administration Services
- Auditors: Deloitte & Touche