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The Industry

Members

 

Members are the whole reason behind retirement funds. It is their details that are recorded, their contributions that are received and their assets that are invested. They need clear communication in order to make informed choices relating to opportunities such as Additional Voluntary Contributions and other tax efficient advantages.

 

Membership information and the Fund:

 

New Members:   

Application form

Nomination of Beneficiary

Monthly Schedule - to accompany the contribution cheque with details of members’ funds.

 

Exit Members:

Withdrawal form

Tax Assessment form

 

The following main types of withdrawal apply with varying tax implications:

 

-       Resignation

-       Dismissal

-       Retrenchment

-       Retirement

o   Upon retirement a member’s bank details and forwarding address should accompany the Withdrawal and Tax Assessment Forms.

-       Death

o   Upon Death the following additional forms are also required before a claim will be processed:

A certified copy of the Death Certificate

A Death Claim Discharge form

The Nomination of Beneficiary form

Beneficiary(s) proof of age (ID; Marriage Cert; Omang; Birth Certificate)

-       Liquidation

 

Payment of claims

 

After receiving all the above documents the administrator will calculate withdrawal benefits, liaise with the department of taxes and communicate with the Principal Officer as to any possible queries arising.  After all issues have been cleared the payment will be processed.

Member Information

-       Benefit Statement

 

 

 

Principal Officer

 

The Principal Officer is the main point of contact between the Regulator and the fund. He shall be resident in Botswana and when out of the country for a period exceeding 30 days an alternate should be put in place. He is responsible for maintenance of provisions prescribed by the act.  

 

Trustees

 

Trustees are responsible for managing the business of the fund. Their main objective is to control, direct and oversee the running of the fund.  

 

Duties of trustees are to:

 

-       observe the terms of the Rules;

-       avoid conflicts of interest

-       Act with due care and diligence

-       Act in good faith

-       Act with impartiality

-       Invest the assets of the fund

-       Settle disputes

-       Delegate

 

Trustees should take out Trustees Indemnity Insurance which protects the fund against losses resulting from their negligence; dishonesty or fraud.

 

Service Providers

 

Service Providers enter into Service Level Agreements (contracts) with their clients for specified periods. The SLA would detail the purpose of the agreement; define the services offered; the delivery times; the frequency of meetings; the duration of the contract; confidentiality; termination and dispute settlement.

 

  1. Administrators

 

Proper administration is essential to ensure the smooth operation of the fund and to provide member satisfaction. Administration also includes compliance with the statutes governing the pension fund industry. This requires close liaison with the employer, the regulatory authorities and the investment managers.

 

Administrative services include:

 

Accounting services include:

 

Record keeping

Accounting records

Benefit calculations

Management accounts

Benefit statements

Annual audit

Reporting

Statutory returns

 

Signatories

 

 

 

 

2.            Retirement Fund Consultancy

(Usually offered by the Administrator but can be obtained independently)

 

The Consultant would provide services in the areas of pension and provident funds benefit structure design, including pension consulting as well as providing actuarial and technical advice and implementation. Consultancy also includes compliance with the statutes governing the pension fund industry. This requires close liaison with the Employer, Trustees, Members, Regulatory Authorities, Investment Managers and Administrators.

 

Consulting services include:

 

Drafting Rules

Preparation of Members Handbook

Initiating and Effecting Rule Changes

Arranging for Actuarial Valuations and Simplifying the Reports

Appointment of Auditors and Actuaries

Ensuring the Fund is Compliant

Training Trustees and Members

Counseling Retiring Members

Arranging Risk Benefits

Providing Minute Taking Services

Professional advice where required

 

3.            Asset Managers

 

Asset Managers are appointed by the Trustees who would have normally gone out to tender for the service, inviting different managers to present their approach to retirement fund asset management.

 

Asset Management services include:

 

Review of membership profile – this often requires actuarial input.

Assessment and recommendation of the Long Term Asset Allocation strategy

Investment of assets within the strategy.

Setting up appropriate performance benchmarks

Monitoring and analyzing investment returns against performance benchmarks

Monthly and quarterly investment reports

Independent Custodial services for securities

Asset insurance

General Trustee Training

 

 

 

4.            Auditors

 

At inception, a retirement fund is required to appoint an auditor who will independently audit the accounts of the fund and prepare specific reports for the Regulator. These requirements are to ensure the safety of pension fund assets for the benefit of the members and their dependents.

 

5.            Actuaries (where applicable)

 

Depending on the type of scheme, an actuary has to be appointed to the fund. Actuarial services are fundamental to the design and ongoing monitoring of Defined Benefit assets which must be valued – by an actuary – every three years to ensure they are able to meet future liabilities. Defined Contribution funds on the other are less dependent on the services of an actuary but would need the service during times such as member profiling for asset allocation strategies. Provident funds are exempt from this requirement.

 

  1. Regulator & Commissioner General

 

The Regulator approves pension funds that are compliant with the requirements of the Pension & Provident Funds Act. The Commissioner General approves funds that are compliant with the Income Act which sets limits relating to contributions, withdrawals and benefits.

 

  1. Minister of Finance

 

The Minister has the power to make / alter regulations, as necessary / convenient / fair, pertaining to this Act. He also has the powers to set the investment requirements / limits of funds.