Speech by Dube Tshidi, Executive Officer, Financial Services Board delivered at the Numsa Gala Dinner, 7 June 2012

Good evening Ladies and Gentlemen

As usual, it is an honour for me to be with you this evening and to address you on the “ever important” matter of retirement funds.

This is a matter that touches all of us, during the time of active employment and during our inactive retirement time; it is a matter that requires our attention through and through!

Organised labour has over the years played an important role in the evolution of the retirement legislation and the industry.

In legislation – in the that amendments that introduced the involvement of members of funds in the management of retirement funds, Labour was involved;

The introduction of the surplus legislation, Labour was involved; The introduction of provident funds, Labour was there as well;
New legislative developments! Labour should be there!

In industry matters – Labour is a serious stakeholder in the industry body called the IRF.

Clearly all these things demonstrate how the FSB and National Treasury value the role and contribution organised Labour plays.

Organised Labour’s role in the retirement funds space should be for all the funds, and not for one or some funds.

The reason for this is that, legislatively unions do not have a place at the operational level of funds; that is the role of the trustees of each fund, but at global level, yes, it has a huge role to play.

This of cause begs the question what about a union member who gets deployed by a union to become a trustee of a union established fund.

Is he representing the union and its interests in the fund? The answer is NO. What about an FSB employee who is a trustee in a fund? Is she representing the FSB’s interests?

The answer is NO. Retirement funds have interests for member of the funds only.

Only trustees have the duty to protect those interests and no one else. The moment you become a trustee, no matter how you get there, you have to protect the interests of the members. You represents no constituency.

Boards of funds are made up of representatives of both the members and the employers of which at least 50% shall come from members. There is no legal requirement for equal representation, members are legally allowed to have more representatives than employers.

In the performance of their duties, trustees may use the expertise of professionals. So, the power vests with the trustees and not “industry professionals”.

But funds must have experienced trustees who are not going to succumb to the trickery of “industry professionals”.

In looking after the interest of the members of the funds and engaging with professionals, trustees must comply with all the requirements of Regulation 28.

The revised Regulation 28 allows trustees some flexibility to invest in areas previously not catered for. This may be not enough but for now it suffices.

With the wisdom of the trustees together with the guidance provided by Regulation 28, the R1,5 trillion of retirement assets can be utilised for active participation in the South African economy.

When doing this however, trustees must make sure they comply with Regulation 28 requirements and that the mandates they craft are clear and unambiguous. Fees must be interrogated and compared.


Currently there is no policy and legislation to deal with unclaimed benefits from all the industries. The matter, however, will receive attention at some point.

The FSB considers it necessary that partnerships to deal with matters of consumer education, consumer awareness and money management programmes are formed.