A lot has been said recently about prescribed assets in SA. It is important for all of us to appreciate that retirement funds are custodians of retirement benefits of millions of South Africans.
The last concern is worth highlighting because there is nothing in SA law that compels employees to be members of retirement funds, unless an employer provides one as a condition of employment. Bonds are an inevitable asset class for retirement funds, especially if the funds practise asset and risk diversification and require stable income. Prescription does not seem, therefore, to be of absolute necessity, and even if it were to be necessary, it seems to result in unintended consequences that might do more harm than good. History does repeat itself at times, but previous mistakes need not be repeated, and SA has been down this path before.
One could ask, but what exactly is this duty towards members? It is the duty to ensure that members’ assets are invested and managed in the best interest of the members, so that they can retire comfortably. This is the goal that prompted the Treasury to roll out much-needed and extensive retirement reforms in the past eight years. These reforms ensure that the member is put at the centre of every decision made by funds and their service providers.
This fiduciary duty is something the FSCA has a legal duty to monitor. Why is this fiduciary duty also important to the regulator? This is because any fettering of the trustees’ decisions has the real potential to compromise their ability to act in theinterest of fund members. This would further compromise the long-term wellbeing of members, which is undesirable given that it is difficult to recover from bad retirement decisions.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: BDliveSA - 🏆 12. / 63 Read more »
Source: SABC News Online - 🏆 32. / 51 Read more »