Employee Benefits

Gary Mockler
Group Chief Executive Officer

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A thirty-something-year perspective of providing retirement fund services within an ever-tightening regulatory environment in South Africa – CEO Gary Mockler

For over thirty years GTC has been delivering a range of services to retirement funds, always within the ambit of prevailing legislation.  This legislation is invariably completely different from regulations governing how we engage with private investors. 

Employee Benefit (EB) wise, from our inception, we’ve remained benefit consultants.  Since 2000 we’ve had our pension fund administration (13B) license, and we’ve been approved investment managers for a similar tenure.  Counselling obligations came into effect some five years ago.

The Financial Sector Conduct Authority (FSCA), previously known as the Financial Services Board (FSB) began its oversight role in the same year that GTC was founded – 1991.  Our business journey therefore exactly mirrors the National Regulator’s governance of the rules-of-engagement of our industry.

I reflect (fast-rewinding to the early 90’s) on a far simpler environment that went largely unchanged for many years.

Then there was FAIS in 2002, followed closely by FICA, and then POCDATARA (see here for some clarity).

2003 saw the grossly unfair SARS implementation of taxing unclaimed benefits (rescinded in 2009). In 2018 Section 36 of the Pension Funds Act (PFA) brought deferred exits, default annuities, and default investment portfolios to bear.

Each of these new regulatory impositions required a new and different technical process to allow GTC – and all retirement fund administrators – to undertake daily responsibilities.  

In recent years Government has become increasingly concerned about the oxymoron evidenced by the bulk of our population who’s best efforts result in not meeting basic retirement goals (for a multitude of reasons), yet those same members have demanded early access to retirement savings, which – if enacted – will exacerbate the negative retirement outcomes.  Read more here and here.

Government initiated the rationalizing of retirement funding with harmonisation discussions starting as far back as 2013.  The gradual disbanding of provident funds starting in 2021 (which avails retirees of a lump sum from their retirement funding assets), and the introduction of, a singular pension fund arrangement, enforces the compulsory preservation of retirement capital.  Read here about T Day.

Managing legacies and exceptions (in this instance for those members who have already accumulated provident fund assets) is always a complex administrative process. 

Some 16 months later Government issued indicative terms for a system whereby this consolidated retirement savings would – at the same time – be partially made available for pre-retirement spending (the Two-Pot system has been written about by GTC here).

Confused?  You should be.  It’s complicated.  Also difficult, both to understand, and to administer.  The burden of management of each of these changes and exceptions is that of the retirement fund administrator.  

Retirement fund management is one of GTC’s core responsibilities, which we do well, operating South Africa’s 6th-largest umbrella retirement fund.

This industry reminisce may seem indulgent, or even a moan.  It’s not.  It is a pragmatic reflection of a fairly long period of the increasingly complex and onerous tasks and responsibilities of running retirement funds.  

It’s the observation of the juxtaposition and juggling of government policy, as they  wrestle with the conundrum of improving the quality of life for the average South African citizen both before their retirement and after, from a woefully inadequate single pot of money in the first place.