The core functions of a retirement fund are good governance, achieving clean audits, efficient administration, superior benefits and providing healthy investment returns. Only once you’ve ticked those boxes, proving your proficiency in the core functions of a retirement fund, can you turn your hand to innovation. The Natal Joint Municipal Pension / KwaZulu-Natal Joint Municipal Provident Funds (NJMPF) have proved, through its numerous awards both nationally and internationally, that it’s at the leading-edge of proficiency, and is in a strong position to innovate.
“Our list of awards across all these disciplines shows that we have managed to master the fundamentals,” says Chief Executive and Principal Officer at the NJMPF, Sam Camilleri. “Sometimes the work of a retirement fund goes unnoticed because it is done behind the scenes – under the radar so to say – but with the introduction of a phase of innovation, this is when your members and pensioners should start to feel the magic.”
According to Proven Strategies for Success from the World’s Smartest Executives, which reflects how great leaders achieve success through their progressive leadership styles, Camilleri has proven that innovation and continuing momentum drives growth and helps gain a competitive advantage over peers. Experts say in today’s fiercely competitive business landscape, “innovate or disappear”. According to Camilleri: “Innovation from a retirement administration viewpoint goes beyond products and technologies. It is particularly significant to systems, methods and approaches used to enhance performance for members and pensioners who are beneficiaries of retirement funds”.
The retirement industry in South Africa, similar to other countries in the world, is highly regulated through statutory obligations. Due to this highly regulated environment, some funds tend to only focus on just achieving the standard requirements and fail to view systems and stakeholders in their holistic makeup. NJMPF strive to go beyond the norm.
Following are some of the ideas and initiatives which showcase this innovation:
An ongoing commitment to financial literacy
Members of a retirement fund are part of a community. It is well documented that many communities in South Africa have low financial literacy levels, so if you educate members of a retirement fund appropriately on financial literacy topics, you are able to build members who are not only aware of retirement fund matters but also understand basic financial literacy themes which can help them, their families and communities at large.
As part of the NJMPF’s Financial Literacy Programme, a dedicated Client Relationship Officer visits members at 55 municipalities throughout the year, explaining the benefits of the NJMPF funds and presenting educational financial literacy subject topics.
Some of the programme’s topics include budgeting, inflation, compound interest, saving enough and from an early stage and the importance of drafting a will. Workshops are held twice a year at the Fund’s offices for Human Resource and Payroll staff from the municipalities to attend training, refresher training and launches of new services.
Using IT to drive innovation
During 2016, the NJMPF began developing an interactive website to meet the needs of its members and pensioners. The website allows members to login and access content in English and Zulu, which are the languages of the majority of members. The site also features training videos, financial literacy articles and tools, net replacement ratio explanation, loan repayment calculators, instant access to pension certificates and benefit statements, allowing stakeholders to have instant access anywhere and anytime.
Soon, the NJMPF will debut a cross-platform mobile application that will allow its members to have easy and direct access to information and benefits using their smart phones. Research conducted on smartphone usage reports that access in South Africa is growing rapidly and this is becoming a significant communication medium.
According to Camilleri: “Through its smartphone application, NJMPF aims to influence and motivate members to improve their financial provision for retirement and also encourage members to think about retirement planning daily.” The new mobile phone app will also allow members to be alerted of important notices by the Fund.
A new election process is being introduced at the NJMPF. All members now need to vote directly for members onto the Board of Trustees. This provides an opportunity for the NJMPF to think outside the box and introduce innovative processes.
Each candidate will be allocated a unique identifiable barcode, which will 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. Members can sign into the web portal and click the voting tabs. The election data is then filtered back to the NJMPF for counting. The unique barcoding system will assist in preventing any duplicate ballots and assist in verifying each ballot. The system will generate validation reports and flag any potential inconsistencies.
SMS communication has been prioritised of late with great success. Notifications are sent for all important announcements and recently systems have been enhanced to send automated acknowledgements on receipt of declaration forms and reminders where necessary.
Insourcing to improve benefits
Ever mindful of containing costs, the 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, the NJMPF retains such amounts in a self-insured fund, which has proved to be most successful.
The NJMPF is well positioned to capitalise on the South African government’s proposal for contributing members to the Provident Fund to invest in in-house annuities. It has readied itself for this imminent new legislation and will cater for a seamless transfer of a member from active membership, to becoming an in-house annuitant at a much reduced cost to the member.
The communications strategy, treating customers fairly policy and the Financial Literacy Programme adopted at the NJMPF drive the management and staff to continually find new ways to enhance value to all stakeholders. The NJMPF is continually finding new ways to communicate.
Besides the traditional methods of communicating, the member roadshow team make over 80 visits to municipalities a year, employer workshops provide enhanced training, forums for guardians and care-givers provide a connection to the Fund and pensioner roadshows in key cities and towns across the Province of KwaZulu-Natal, South Africa keep these stakeholders well informed and in close contact with the Fund.
“Reach for another star”
Sam Camilleri’s philosophy is simple: “Look at what constitutes best practice and then try and surpass that. It is in the Fund’s DNA that staff members are constantly improving the way they do things. Success leads to success so each award we win, each clean audit reported, each financial literacy session completed, each new communication channel opened inspires us to reach for another star.”