Issue: April/May 2006
Down to the ground - communication with guardians
When a retirement-fund member dies, leaving minor children as beneficiaries, trustees may decide to pay the death benefit into an 'employee-benefit trust' (also known as an umbrella trust). Although the average benefit is only around R30 000 per beneficiary, careful investment and management of this amount through a trust can educate and sustain a child until he or she reaches majority age.
Initially, trustees have the difficult task of identifying the deceased's dependants. They then need to appoint a trust administrator, Once the trust has been established, the administrator assumes the primary responsibility of ongoing communication with the guardian and/or beneficiaries.
Trustees have every right to expect proactive communication from administrators. They also need to know that service providers are close enough to the beneficiaries to ensure that the family will benefit properly from the trust.
At basic levels, smooth communication is frequently thwarted. Many guardians, often in remote areas, are semiliterate and their personal information might have changed.
For example, to ensure that monies are paid into the correct bank account, we require a beneficiary information form to be updated annually. But, often, this requirement isn't met - either because the recipient had a new address, or was unable to read the letter, or simply didn't understand its importance.
As a result, no money is received by the beneficiary. Typically, the guardian then complains to the deceased member's employer about the lack of service.
There's clearly a need for more direct, grassroots communication with guardians. Perhaps administrators may be advised to arrange regular roadshows or workshops, in the mining industry, such roadshows are exceptionally well attended. With interpreters on hand, guardians and families ask - and can be answered - all manner of questions.
Trustees and administrators should decide together whether such workshops can overcome their particular communication difficulties. They could enlist the help of consultants for advice on timing and a venue to which guardians can travel at least cost and inconvenience. The event could be publicised on community radio stations.
Service providers must become more creative to address the communication imperatives. For trusts to be better understood and used to optimal benefit, it's for service providers proactively to launch appropriate education programmes.