Issue: June/August 09


Asisa makes the leap

Campher...investment support

Campher...investment support

At the Association for Savings & Investment South Africa, we noted with interest your recent column on trustee training (TT March- May ’09). Given the subject’s importance, and the urgent need to stimulate much-needed progress by keeping the debate alive, we would like to share with you some of Asisa’s views on this topic.

Trustee education presents an ongoing challenge. We share your view that a centrally-coordinated national initiative is required if the needs of the trustees and the members of more than 15 000 pension funds in SA are to be adequately met.

As you pointed out, this central coordinating role should sit with the Financial Services Board (FSB) as the regulator of retirement funds. Currently the Insurance Sector Education & Training Authority (Inseta) is trying to make a difference in this space, but with limited success as the coordination across stakeholders is not driven centrally.

However, despite what appears to be endless consultation, some good has been achieved. In 2007, for example, Inseta launched its Retirement Fund Trustee Training initiative which places emphasis on retirementfunding issues as well as the governance and legal aspects of being a trustee.

We have found, however, that the investment aspect of trustee training remains the domain of individual asset management companies. You mentioned in your column that this often creates the perception, even if unwarranted, that the training is tainted because it amounts to product promotion.

We have therefore proposed to the FSB and Inseta that the Asisa Academy launches a trustee education programme that complements that of Inseta with emphasis on the investment context and the investment strategy process within the retirement-funding context.

The intended outcome of the Asisa Academy programme would be to enable trustees to understand the investment environment, apply the learning to the governance of their retirement funds and interact more effectively with their fund’s investment advisers and investment-related service providers.

Ironically, while we are committed to putting this programme into place with urgency, more consultation will be required with the members of the savings and investment industry as well as other stakeholders around the content and delivery options of this programme.

This interaction is important because we do not want to reinvent the good work that has already been done in this space by a number of Asisa members.

Consultative workshops will take place in June under the guidance of Terence Berry, principal of the Asisa Academy.

The Academy was established towards the end of 2007 to provide the SA savings and investment management industry with an independent and practical learning environment that could be applied to furthering young talent emerging from within the industry.

Registered as an independent non-profit s21 company, the Academy actively aligns all of its learning programmes with the National Qualifications Framework and structures its long-term programmes as learnerships.

The Academy therefore has the infrastructure and the Bankseta accreditation that will enable it to define and develop high-quality learning solutions that are informed by, and responsive to, trustees’ learning needs.

While the Academy initiative is certainly not what you had in mind with “taking the bull by the horns”, we believe that it will go far in addressing a number of the concerns that you raised. For one, it will move the industry away from training offered mainly by service providers to an industry initiative run independently.

– Leon Campher, chief executive, Association for Savings
& Investment South Africa

Practical realities

Your article on trustee training, headed ‘Rampant bull’ (TT March-May ’09), was certainly pertinent. As the founder of a trustee training company, I agree wholeheartedly with many of your observations and have a few additional comments.

Trustee training is indeed a national priority. Most formally-employed South Africans make little provision for retirement beyond their compulsory group schemes. It is therefore of huge concern that the individuals elected to govern these funds are not required to complete some form of national assessment to ensure they are capable of fulfilling their roles as trustees.

Unit standard-based courses partially meet this need. They involve a formal assessment and provide competent delegates with nationally-recognised credits. However, there are few training providers delivering these courses. Of those that are, I question how many trustees are actually completing the required assessments and being found competent.

There are many advantages to completing a unit standard-based course. Amongst them are the assurance that the training provider complies with the many INSETA and SAQA requirements; having certainty over the specific outcomes that will be covered in the course material, and delegates completing a formal unit standard-based assessment. Unfortunately, these courses are time consuming and administratively intensive (which comes at additional cost) in that:

  • Course material needs to be aligned with relevant unit standards;
  • Delegates need to complete a range of formative assessments throughout the training and a formal summative assessment on completion of the course. This summative assessment usually comprises a portfolio of evidence, practical research assignment and written knowledge test;
  • Both the formative and summative assessments then need to be assessed by a registered assessor. Detailed feedback must be provided to the trustees regarding their assessment results and a range of assessment forms need to be completed and signed off as proof;
  • 25% of delegates’ assessments then need to be moderated by a registered moderator and 10% of the assessments verified by the INSETA;
  • Only then is the training provider able to load the delegates’ assessment results onto the National Learner Record Database and issue certificates of competence.

So the actual facilitation and assessment process only comprises about 50% of the workload. The rest of the time is consumed by administration.

There is definitely value in having trustees complete a formal, nationally recognised assessment. It requires them to take the course seriously, ensures they understand the training material sufficiently and provides them with a goal. We’ve also found that many trustees attending our unit standard-based courses value the fact that they will achieve nationally-recognised credits. Possibly, however, the process is too administratively burdensome.

We’ve been delivering unit standard-based trustee training courses since 2005, but still find that most clients continue to ask for customised in-house courses. This leads to the question of whether lack of demand from trustees for the former is based on insufficient understanding of their value and led to the limited number of training providers currently offering such programmes. Or whether the limited support for such courses by training providers, in response to the additional time and cost involved in offering such programmes, has resulted in the negligible demand for such courses by funds.

Either way, there is a lack of drive and commitment for unit standard-based courses by trustees and training providers alike.

– Joanne Miller,
InvestmentWise, Cape Town

Constructive approach

While I’d like to debate some of the detail in your editorial ‘Rampant bull’ (TT March-May ’09), I applaud and agree wholeheartedly with the underlying sentiment. Trustee education is imperative for the proper governance of retirement funds. It can be done successfully.

I have been delivering trustee education to boards of trustees, big and small, since 1999 and have seen firsthand the impact that can be made. There certainly are challenges and obstacles, but they are not insurmountable. For the past five years the training has been independent, with the material and discussions free from real or perceived serviceprovider influence.

I am employed, briefed and remunerated directly by the retirement funds themselves, creating the right lines of accountability and responsibility. Increasingly, I work with boards over longer periods. This helps build relationships which improve communication and therefore learning.

Yes, in the big picture trustee education might be “all over the place” but, in pockets, good and exciting things are happening. These can be leveraged into something that reaches more trustees and reaches them even more effectively!

My skeleton of a potential solution envisages at the centre an independent industry body with proven experience at designing and implementing solutions. The Financial Services Board should task it with implementation of trustee education.

Crucial to this vision are:

  • An independently developed curriculum with material owned and maintained by the independent industry body;
  • Independent trustee educators who are contracted, prepared, briefed and paid on a course-by-course basis, with quality assured by this independent industry body;
  • Service-provider support limited to input to the curriculum definition, giving comfort that issues of concern to them are covered, and consultation on technical aspects of the material ensuring that all is technically correct; and sponsoring the cost of specific trustee education programmes, thereby achieving the desired marketing exposure without compromising (in reality or perception) the independence of the material or its delivery.

In terms of funding, I suggest:

  • Annual grants from the National Skills Fund;
  • Discretionary grants from the three relevant SETAs (INSETA, BANKSETA and FASSET);
  • Sponsorship of the independent industry body by service providers, for which they may receive credit in terms of corporate social responsibility;
  • Payment for trustee education courses by retirement funds or service providers.

To get started, useful first nibbles might be to identify:

  • An appropriate independent industry body. The ASISA Academy, a not-for-profit company accredited as a learning provider by BANKSETA, is well positioned for this role;
  • Tried and tested curricula as a basis on which to fast-track the process of further programme development, building on the work already done by INSETA with relevant stakeholders.
– Eleanor Fraser,
via e-mail