Mixed reaction from retirement funds on new regulations
There has been a mixed reaction from retirement funds since new default regulations affecting them came into effect, according to Jocelyn Hathaway, acting CEO of Sanlam Employee Benefits.
The regulations were finalised in September 2017 with the deadline for full compliance set at March 1, 2019.
Some funds were quite reactive. They followed a "tick-box" approach by covering the bare minimum and not doing much proactively.
"We decided to be quite proactive about the regulations by reflecting on how we can better enable fund members to be financially resilient. More regulation typically adds to complexity and cost. However, we saw the regulations as an opportunity to introspect and reconsider our operating model to be more efficient, engaging and effective," she said at a recent media information session on the topic.
"One can be quite negative about the challenge created by ever increasing regulation or one can actively explore, like we did, how to create value for our stakeholders. For us it is not a tick-box exercise, but a chance to create meaningful opportunities to ultimately guide clients to better outcomes."
The role of consultants in the process has become very increasingly important in her view as they need to guide trustees to implement meaningful solutions in order to execute their fiduciary responsibilities.
"We think there will be a responsibility on the Financial Sector Conduct Authority (FSCA) to monitor both compliance with the regulation but also the outcomes delivered by retirement funds."