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By Tkay Nthebe
I had the privilege of attending a retirement conference themed “A decade of retirement reform” hosted by the Institute of Retirement Funds Africa (IRFA) in Durban on 5-6 September 2022. One of the speakers boldly said ‘Retirement is not an accident, it’s an incident. Let’s take responsibility and plan for it.’ These words have since stuck with me because there’s a lot of truth in them. As we continue to educate ourselves about pension laws and retirement funds; this week’s article focuses on the role of the board of trustees.
Who is the board of trustees?
A board of trustees is responsible for protecting the interest of members of pension funds by acting with due care, diligence, and good faith. According to Section 16 of the Pension Fund Act of 2019, a board of trustees should have an odd number of at least five (5) members but not more than eleven (11) members. Where the fund is an Umbrella Fund, a sponsor like Alliance Insurance Company can appoint its own board of trustees where at least one trustee must be independent, member and employer representative trustees.
What are board of trustees responsible for?
As mentioned above, the board of trustees is responsible to act in the best interest of members, manage the fund, and ensure it complies with all relevant laws for example Pension Fund Act of 2019 (PFA), Income Tax Act of 1993 and Children’s Protection and Welfare Act of 2014.
The board of trustees must also ensure that the fund has a code of conduct, manage any conflict of interest, and ensure proper control systems are in place as per Section 17 of the PFA. The board of trustees must also appoint professional service providers such as asset managers, auditors, actuaries, and administrators to perform expert functions required by the fund.
Another important function the board of trustees must perform is to ensure that the collection of contributions is paid on time, proper registers and records are kept. The board of trustees is also required to ensure that members receive relevant communication regarding the fund and its performance.
Furthermore, as discussed in the article ‘Why you must complete a beneficiary nomination form’, the board of trustees must ensure members of pension funds complete and update beneficiary nomination forms and act impartially in respect of all members and beneficiaries.
What are your responsibilities as a member of a pension fund?
Quoting the speaker from the IFRA conference “Retirement is not an accident; it is an incident”. As a member of pension fund, it is important that you familiarise yourself with the role and responsibilities of the board of trustees, read the prospectus and rules of your fund. When you are empowered, you can make sound financial decisions regarding your own retirement. Should you need more information, speak to the Employee Benefits team at Alliance Insurance, or visit www.alliance.co.ls .
Source: Pension Fund Act No.5 of 2019