Edition: September / November 2017

Best for members

“In the context of a retirement funding arrangement, improving member outcomes is concerned with building a retirement funding service which changes the mindset of members, achieves a cost-effective retirement administrative platform, welcoming the future through innovation and technology whilst strategically positioning members’ total value proposition regarding retirement services at the centre of decision making”, writes Sam Camilleri, Chief Executive/Principal Officer of the Natal Joint Municipal Pension & Provident Funds (NJMPF).

The NJMPF is a retirement fund for municipal employees in KwaZulu-Natal.

It administers pension funds for the employees and pensioners of the province’s 55 municipalities. Its vision is to provide superior retirement services and benefits to 30 000 active members, pensioners and beneficiaries.

Camilleri . . . industry leader

At the NJMPF, retirement funding services are about more than collecting contributions, investing responsibly and paying out benefits. They are also about building a member who is aware of his or her current financial situation, able to forecast for the future and exceed or maintain standards of living after retirement.

This view of placing the stakeholder at the centre of retirement funding has resulted in the NJMPF being recognised by both local and international industry institutions. They have recognised the NJMPF for its unwavering levels of good governance, top quartile investment returns and dedicated communication programmes, treating customers fairly, financial astuteness and being the benchmark to which other funds can aspire.

Innovation in retirement administration goes beyond products and technologies. It is particularly significant for systems, methods and approaches used to enhance performance for beneficiaries of retirement funds.

Due to SA’s highly regulated environment, some funds tend merely to achieve standard requirements. They fail to view systems and stakeholders in their holistic makeup. NJMPF strives to go beyond the norm.

A new election process is being introduced by which all members will be able to vote directly for trustees. This system will allow each candidate a unique identifiable barcode to assist in automating the scanning and counting process. In addition, a unique barcode will be generated for each member’s election form.

The voting method has also been enhanced to include voting via the NJMPF webpage and mobile app. Members can sign into the NJMPF web portal and click the voting tabs. The election data is then filtered back to NJMPF for counting. This system will assist in preventing duplicate ballots and assist in verifying each ballot. It will also generate validation reports and flag potential inconsistencies.

Further, a new mobile app has been introduced. It will allow members to interact with the fund at any time. The objectives are to use technology as the primary means of communicating notices and news whilst also capacitating stakeholders to become more financially literate. This, together with the improved NJMPF interactive webpage, will motivate members to improve their financial provision for retirement and encourage them to think regularly about retirement planning.

NJMPF is looking not only at reducing costs at the saving stage of the member, but also at the time of retirement by offering in-house annuities with an approximate saving in annual fees of 3% to 5%. Also, NJMPF is using its own balance sheet to create reserves to meet death and disability benefits for its members. Instead of an outflow of premiums to an outside insurance company, NJMPF retains such amounts in a self-insured fund which has proved to be most successful. Increases and bonuses declared to NJMPF pensioners significantly surpass inflation.

Anticipating legislative changes, NJMPF has investigated ways to assist provident fund members when they reach retirement age. NJMPF will soon offer an in-house annuity at a significant discount on standard fare.

Regularly engaging and interacting with the membership, and exercising the NJMPF Financial Literacy wellness programme, are important parts of the fund’s communication strategy. NJMPF has always believed that financial literacy requires a shift in thinking and behaviour. That’s why we are engaging members and pensioners through practical and efficient methods of communication, even helping inform them on debt management.

A campaign to liaise directly with senior municipal officials has proved worthwhile. It improves communication between the employer, the fund and members while also helping the NJMPF better to understand some of the financial challenges faced by members. This knowledge then guides the fund’s financial literacy programmes.

Our philosophy is simple: ‘Look at what constitutes best practice and then try and surpass it’. The philosophy is seen to apply in practice. It’s acknowledged by NJMPF being the recipient of 21 local and 11 international awards, making it the most awarded pension fund in SA.