Issue: September/November 09
Editorials

PENSIONS ORGANISATIONS

Does the IRF still have a role?

One would like to think so. There are serious doubts, however. They aren’t necessarily through faults of its own making.

The Institute of Retirement Funds is nice to have. It’s there because it’s there, and it’s been there for so long that its existence is perpetuated unquestioningly. So it shouldn’t be.

A pertinent question, on reading its latest annual report, is why it should exist at all. What does the IRF actually do? The directors, in their review of activities, explain that the organisation “is engaged in pension services and operates principally in SA”. That’s it. No mention of the services unique to the IRF. No indication of whom it serves, or why; or whether the services are considered by any particular grouping to be particularly useful.

For information on what the IRF actually does, look at the financials. Mainly, it holds an annual conference. To hold the conference, it needs a secretariat. What the secretariat mainly does is organise the conference.

And this in an industry that, if anything, is heavily over-conferenced. Any number of organisations – the Pension Lawyers Association, the Principal Officers Association, financial institutions and a plethora of other service providers – are holding any number of conferences, seminars, symposia, workshops et al more targeted and specialist than the IRF all-comers’ jamboree.

The same question, put differently, is whether the money spent on the IRF can’t be more valuably spent or perhaps saved by those who provide it. In its financial year to end-March, the IRF’s income of R7,05m came primarily from membership fees (R866 000), sponsors of the annual conference (R2,16m), conference-delegate fees (R3,26m) and sponsorship of the conference’s gala dinner (R313 000).

Against this, its total operating costs were R2,23m of which employee costs amounted to R1,38m. Surplus for the year was R1,25m.

So the IRF is a well-run little business. But whether it has worth as a business seems to rely largely on the worth of its conference.

What it’s supposed to be is a forum for information exchanges, education, discussion and networking of major industry participants. They certainly attend in droves. What it’s at risk of degenerating into – and some will contend that it has already – is something less.

A few observations shared by the disenchanted:

  • Durban has become the most frequently used venue because it’s most popular for trustees that the conference most wants to attract. Many trustees then travel at fund expense to a holiday destination, rock up for registration and the dinner, but are otherwise rarely to be seen;
  • Conference sessions are then unbalanced with a preponderance of service providers. They’re addressed on subjects with which they’re pretty familiar, and they talk to one another. In relation to the conference’s intent and potential, interaction with trustees is limited;
  • Few trustees engage with personnel who staff the service providers’ exhibition stalls. Rather than grab the opportunity to pursue retirement-fund issues, they’re more inclined to grab the freebies that exhibitors make available;
  • The conference is held for the sake of holding a conference. It’s become difficult to find topics of sufficient interest that aren’t being addressed at other conferences.

Supporters of the IRF have a brighter view. They argue that it does much more than only hold a conference, still the largest of its kind and attracting quality speakers. They point to outputs of the IRF’s legal and technical committee, as well as meetings of its communications and investment committees, all serving to expand participants’ knowledge and articulate views for the board to formulate IRF policy. It also offers perspectives to the public on retirement-fund matters, in addition to providing government bodies with feedback.

Inevitably, there is duplication but there’s also collaboration with other industry associations. The Financial Services Board, National Treasury and Social Development aren’t known to complain of private-sector comment on retirement funds being scarce.

The work of the various IRF committee members is performed without charge so requires no budget. Hence, the conference aside, there’s no obvious reason for the IRF infrastructure.

Not for want of trying does the IRF remain dominated by service providers, at least as another platform for them, but it cannot purport to speak for the amorphous mass of retirement funds. In recent years, the IRF has gone all-out to become more inclusive particularly of organised labour. The processes to hear it are in place, and the hope is that they will yet bear fruit after the failed attempt by labour (claiming the high ground for fund members) to establish a separate institute of trustees alone.

Were the IRF to become as representative as its name implies, it can only be good for all industry participants in so far as financial institutions and trade unions were able to work out common positions on matters critical to members of retirement funds. Were it not, it’s fund members who’re the losers.

Were the IRF to become as representative as its name implies, it can only be good for all industry participants in so far as financial institutions and trade unions were able to work out common positions on matters critical to members of retirement funds. Were it not, it’s fund members who’re the losers.