After five years asSanlam Umbrella Fundchair, David Gluckman, who stepped down in March this year, has urged the retirement industry to take bold steps to simplify systems, improve competition and protect members from future risks. Reflecting on his tenure, industry stalwart Gluckman highlighted the fund’s resilience through the Covid-19 pandemic, significant membership and assets growth and the healthy build-up of reserves to support members. Addressing the Sanlam Umbrella Fund Symposium earlier this year, Gluckman issued a call to action to industry and regulators, sharing five recommendations: Gluckman said the separation of otherwise identical pension and provident umbrella funds was costing members money.
“The legal distinction between the two types of funds fell away years ago, yet the industry has made virtually no progress in consolidating them. “Every transfer between pension and provident umbrellas requires a full Section 14 process, employer by employer. That means thousands of separate applications that could take 20 years or more to resolve and cost members hundreds of millions of rand.” “Members would see no disruption and no stakeholder would be disadvantaged in any way, and would also save tens of millions of rand annually in unnecessary charges and costs.
That is money that should be working for members’ futures and a problem that can easily be solved albeit only with new thinking.” Gluckman warned that red tape had become one of the most persistent obstacles in retirement fund governance. “Today, senior trustees are signing off on documentation for trivial transactions — sometimes involving only a few hundred rand. We are forcing high-level professionals to operate as clerks rather than strategic custodians of members’ savings.” Examples include standard rule amendments, liquidations of small employers and routine Section 14 transfers, even for single-member amounts.
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“This is not a good use of the industry’s leadership capacity. It slows down processes, increases costs and creates barriers to competition. It also deters capable people from serving as trustees, because they spend their time wading through paperwork rather than shaping the future of the system.
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