Clean Data: A Crucial Factor to Pensioner Happiness

Agenda

• Introduction• Trustees• Data• Issues in the market• Reliance on third parties• Case Studies• Suggestions• Conclusion

Introduction• SolveCo• Project-based• Various Projects through Africa• Forum to discuss experience• The need for more focus on data

Trustees• Main duties:

• Manage the Fund• Fiduciary duties

• Trustees informed on need to know basis• Normally not involved in day to day running of fund• Change regularly – history lost, no transfer of

knowledge• Not enough experience and training• Conflicts of interest

Good Data

• Trustees• SoF and benefit payments are correct• Appropriate advice• Less data reserves• Lower and fewer PI claims

Issues in the Market• Problem with migrations – no testing done on old data and new system• Unclaimed benefits seems to be a general problem• Transfers in and switches between portfolios have to be checked carefully• Actuaries not always keen to share all information• Surplus allocations are always a problem• Mismatch between contributions received and invested• Mismatch between the valuation report and the financials• Incomplete audit schedules• Poor documentation and communication • Poor filing of fund history

Reliance on Admin System• Trained, passionate staff• Human Error• Short Cuts• Documentation• Migration Errors• Inaccurate history keeping• Audit trails not correct

Reliance on Auditors and Actuaries

• Trustees have high regard for auditors and actuaries

• Trustees do not always understand due to unclear reports

• Auditors and actuaries place responsibility on administrator

Reliance on Consultants and PO’s

• Consultants independent• Not always experienced• Conflicts of interest

Case Study 1:Surname Changes

• Miss Adams became Mrs Brits• Miss Adams exited• Mrs Brits treated as new member• Miss Adams’ money moved to unclaimed

benefits Lost in the system• Uninformed members are unaware of size of

SoF

Case Study 2: Section 14 Transfers

• Timing of allocation/investment – more often than not a problem

• Money in bank, not allocated on system• Unitised funds: not using correct unit

price• Bonus-rated funds: loss of investment

return

Case Study 3:Exits and Re-entries

• Statuses do not correctly change when exit

• Member re-enters the fund – different scenarios

Case Study 4:Missed Contributions

• Missed/Unallocated Monthly Contributions• Section 13b or Section 14• Overlapping months’ contributions• Neither administrator takes responsibility for that

money and the investment thereof• Very difficult to pick this up

Case Study 5:Uniqueness of Funds

• All parties involved must understand the funds• For example:

• Airline’s fund – hostesses get married a lot – a lot of surname changes

• Cleaning services – high turn-around in staff• Security services – mores PHI/GLA claims than a

bank for example

Case Study 6:Rebuild Exercise

• Report on rebuild exercise• Report inconsistent and contradicting itself• Confusing everyone

Case Study 7:Unclear Instructions

“Apply a bonus of 9.4329% to all active members”

• No date for when to apply• No rules how to apply• No list• Administrator must do the calculation• Actuaries are far removed from the administrator

Case Study 8:Choose the correct service provider

• Data clean-up exercise• “The trustees have failed, as required by the Pension Funds

Act, to take reasonable steps to ensure that members’ interests are protected, she (Muvhango Lukhaimane, Pension Fund Adjudicator) says.”

• Trustees were found liable in their personal capacity for R20m – case pending

Case Study 9:Proper Record Keeping

“Absolutely Bloody Final Data for merge 20100421.xlxs”

• Actual file of an administrator• Worked through their services• History of the fund gets lost

Suggestions

• Make sure all parties understand the funds• Appoint appropriate experienced service providers• Make sure SLA’s are in place, up to date and enforced• PI cover for service providers in place• Make time to understand audit and valuation reports• Take responsibility for your data• Go through proper testing when changing systems

Conclusion

• Problems exist• Understand limitations• Take responsibility for your data

Questions?

Megan Cronjémegan@solveco.co.za+27 11 782 4725