Altertude: RunwayEdge

Andre Lindeque
Senior Servicing Consultant  

 

 

 

Having presented some of the capabilities and components of GTC’s Altertude platform in the previous Trendline, in this edition we are drilling down into some of the individual components of the technology stack, giving some insight into its capabilities.  We start with RunwayEdge.

What is RunwayEdge?

RunwayEdge is a computer aided counselling process.  Responding to Government’s amendments to the Pension Funds Act several years ago requiring that all retirement fund members be ‘verifiably counselled’ GTC progressively created a platform which undertakes this complex member engagement process in such as way as to be comprehensive, non-invasive, distinct from any form of financial advice, succinct, and – meeting Government’s requirements – verifiable.   

Why perform counselling?

Regulatory changes were made to Sections 36-39 of the Pension Funds Act in 2019.  These govern the law around the counselling of retirement fund members.  The Act sets out clear parameters regarding the minimum interaction which a Board of Trustees of a retirement fund must have with its members, identifying various specific career events upon which counselling must take place. 

This legislation dictates that counselling must be provided to all members belonging to an employer sponsored retirement fund, so that they are able to make informed decisions about their retirement savings.

The regulations requires that members be given facts (counselling and not advice) before making decisions which may impact their long-term retirement savings goals. 

At GTC, we proudly confirm that we have been performing counselling to members for many years before these government amendments were introduced.

We’d also like to caution fund members about relying only on the counselling.  Retirement fund monies are so integrated with tax complexity, that it is – in our strong opinion – imperative to seek professional financial  advice when looking to activate or transfer retirement fund monies, or to elect contribution or risk benefit options.  

Who performs the counselling?

In accordance with the law, where GTC retirement finds are responsible, counselling is performed by a GTC dedicated team – Member Advice Portal Support (MAPS).  Through this team of professionally accredited staff, counselling takes place as legally prescribed.  With some thirty years of experience dealing with fund members and private investors, GTC has learnt that information alone is often not enough. 

Clients often request that the information be interpreted, with an opinion as to what should be done.  Advice then follows.  This is only allowed to be given by regulatorily certified persons.  Many of the MAPS team are approved to give this advice.  The MAPS team is seamlessly able to move from compulsory counselling to voluntary advice, without having to be separately informed of the facts, and start the dialogue again.

What is counselling?

So far as the Pension Funds Act is concerned, counselling is the sharing of factual information regarding a member’s contractual options that are available at various milestones in their career-long fund journey.  These events include joining a new employer, resigning, retiring and approaching retirement.  Distinct from counselling, advice involves passing an opinion as to the best course of action based upon the facts to hand and the circumstances around this which shape the recommendation.  

By way on an example, a new employee joins a company.  During the counselling process they are typically provided with information regarding contribution levels, investment options as well as risk benefit levels.  If, during the counselling session this member requests help in considering which contribution level to elect and what multiple of life insurance to choose, this constitutes advice.  At this point, the member is referred internally within MAPS to the appropriate financial adviser who then formalises the process by making a written recommendation.

During the mandated counselling session, those nearing retirement are provided their retirement options and the tax consequences for each possible decision they could make.  Once again, if the member asks for guidance or is unsure of their decision, they are transferred from the counselling to the advisory team.

What differentiates RunwayEdge in the marketplace?

Since the implementation of the legislated counselling GTC has been of the opinion that whilst laudable in its intent, the regulations address too few of the many complex (usually tax driven) decisions that members’ are required to make over their working careers.

Based largely on our more than thirty years’ experience of dealing and consulting with fund members during all the conceivable stages of fund membership, GTC has identified many other important counselling milestones. These include:  Getting married, buying a house, having a child, receiving an inheritance, being promoted, getting divorced, and many more. 

 

Together with the human resources departments of our participating employers within our retirement funds, GTC tailors a specific and proactive member engagement programme, engaging with non-invasive information sharing (counselling) as well as detailed scenario planning and recommendations (advice).

GTC’s counselling and advisory processes are backed by another component of our technology stack, our actuarially created advisory program – TrueNorth.

This will be unpacked in the next quarterly Trendline.