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RFIN NEWSLETTER

VOLUME 3, ISSUE 1 NEWSLETTER APRIL 2014

RETIREMENT FUNDS INSTITUTE OF NAMIBIA

Welcome 1

Activities summary 2

Risk Based Supervision 3

UK overtakes Japan in Pen-

sion 3

Disclaimer 4

Quote

Special points of in-

terest:

In terms of NTA Act all

employers with annual

payroll of N$ 1 million, or

more are required to reg-

ister for the purpose of

Vocational Education and

Training levy.

The deadline was 27 Feb-

ruary 2014 and continu-

ous for new businesses.

RFIN Directors pictured with stakeholders in the housing market:

(From right) Mr. Elvis Nashilongo, Ms Bonita de Silva (vice-chairperson), Mr. Melki Uupindi (Chairperson), Ms. Hilya Nandago; Mr.

Mihe Gaomab II, Ms. Sepo Lamaswala- Haihambo, Mr. Gerson V Kamatuka, Mr Neville Field, Mr. Tega Shiimi ya Shiimi

Welcome to the Retirement Funds Institute of Namibia 1st Newsletter of 2014 It is almost unbelievable but true, the first quarter of 2014 has speedily passed. With the global events hap-pening such as the Malaysian missing plane, the Oscar Pistorious trial in SA, Russia merger with Crimea one tend to loose track of days isn’t it? All these events point out life challenges on the systems that we operate in, have effects on the productivity of the working class as well as on the global economy. RFIN remains focused on service delivery to its members. In this regard provision of information to our members remains a top priority despite limited resources. On this score we intend to embark upon a rigorous research process in order to develop a scorecard against which member funds can rate their own performances. These include:-

Investment best practices

Legal and technical best practices

Compliance best practice

Governance best practice

Member service best practice

Member education best practice

Financial reporting best practice

Trustee education best practice

Sustainable development/SRI/ESG best practice In line with the best practices and in conformity with NAMFISA, we will participate in policy development initiatives such us the code of conduct, investment policy, corporate governance policy etc which can be adopted by our members. At this point RFIN also wish to inform you about achievements which have been recorded within the regula-tory landscape. Regulations 26, 27, 28 and 29 have been gazzetted in December 2013 with the effective date of 01 January 2014.

Regulations 26 is the administrative penalty increase from N$5 to N$500 per day, for non-compliance with regulation 28 a penalty is N$ 1000 per day during the period in default.

Regulation 27 is the prescribed interest rate,

Regulations 28 is the prescribed assets that fund may invest in,

Regulations 29 is the investment of pension funds in unlisted investment. In terms of compliance matters retirement funds a required to submit to the Registrar, quarterly returns in a prescribed format after 30 days of the end of the quarter. In this regard RFIN wishes to caution trustees of retirement funds to remain vigilant in making sure that funds are financially sound and comply the law, adopt good corporate governance, risk management and that investment policies are in place to guide them in decisions making. Some current topical matters:

Trustee remuneration The industry need to debate whether or not trustees are to be remunerated.

Regulations 28 and 29 The industry has to map out a way forward to comply with Regulation 28 and 29 by 31 December 2014. RFIN is look forward to engage with the industry to find common ground on these matters.

“Look for 3 things in a person - intelligence, en-ergy and integrity, if they do not have the last one, don't even bother with the two.” - W. Buffet

To Protect, Promote and

Advance your Interest!

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RFIN ACTIVITES January—March 2014 1. RFIN office movement RFIN offices moved from GIPF House who accommodated the office since inception to Unit 5 Lilliencron Street no 13, Erospark Wind-hoek. At the time of this publication, we were still expecting the installation of the new telephone land fax line. 2. Stakeholders engagement Through these engagements the industry keep abreast with the current affairs. The meetings are organized by the Authority for the indus-try participation and to serve as a platform for directly engaging with the regulator. At a recent meeting in March it was noted that the at-tendance of the industry mainly trustees needs improvement. RFIN will be meeting with NAMFISA on 26 June 2014. RFIN also organize events to advance the interest of the industry and ensure that the industry stay up to date specifically with new laws, regulations and standards and share to views. The report for stakeholders engagement for the past period is available on our website. 3. Information Session The first breakfast session was held on 28 March 2014, in Windhoek at Fresh ‘n Wild Café. The effort of trustees is commendable for at-tendance and contribution to discussions on section 37 C of the Pension Funds Act with practical case studies. The presentation is availa-ble on our website. Upcoming Events: 1. Basic Trustee training The Institute organized a basic trustee training is scheduled for 06—07 May 2014. RFIN urges Trustees and Principal Officers to register and attend this exciting and very useful training session. We are running the basic training to ensure that trustees who could not make it last year and/or new trustees would be comfortable to attend this year’s advanced training as well. 2. Annual General Meeting The annual general meeting will be held on 19 May 2014. The meeting is attended by paid up members after a formal notice from the In-

stitute in terms of the Constitution. Members must take note that one director recently resigned leaving a vacancy that needs to be filled.

Another available document at www.rfin.com.na:

A summary of the 2013 Annual Conference

VOLUME 3, ISSUE 1 NEWSLETTER APRIL 2014

File photos: 28 March 2014 Infor-mation Session. RFIN

File photos: September 2013 Annual Conference. RFIN

To Protect, Promote and Advance

your Interest!

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ARTICLES Local

A glance at Risk Based Supervision Approach The approach entails that NAMFISA the regulator of pension funds will focus the time and resources on institutions with a high risk profiles. There are 111 registered funds in Namibia , 63(57%) are pension funds and 24 (22%) are provident funds. Preservation funds and retirement funds annuity are 8 (7%) each, 5 (5%) are unknown, 2 (2%) are hybrids (pension & provident) , with one in other type as per information provided for the period ending 31 December 2013. The spread of members per fund type indicates that 67% and 12% of members belong to pension and provident funds respectively, while 8% belong to preservation funds. Funds that have been inspected by NAMFISA recently, would have noted that the Authority has classified such funds in a category according to NAMFISA’s Supervisory Enforcement Ladder; the Ladder is a tool that NAMFISA developed and adopted to assist with its Risk Based Supervision approach. The Ladder consists of 5 stages of supervisory intervention that NAMFISA intends to undertake in each instance, and the classifica- tion is informed by the risk profile of the fund emanating from on-site inspection findings. Ideally all funds should be categorized as stage 1 in terms of the Ladder. The Ladder was shared with the industry and discussed briefly at the industry meeting in March 2014. NAMFISA has also deve- loped a Risk Matrix, which is a tool that will help the Authority to determine the Net Risk that each entity (fund) is exposed to. This Net Risk rating will also assist in the classification of a fund in terms of the before-mentioned ladder. The intention is to share this Risk Matrix with the industry at the next industry consultation meeting, in order to get input from Indus- try as to how it can be improved. After the inspections by NAMFISA in 2013-2014, most of the inspected Funds are placed in category 1 to 4, where one is good and 4 is seriously worrying. RFIN April 2014 International

UK overtakes Japan as world's second-biggest pension markets LONDON - Years of sluggish growth in Japan have stripped it of its long-held status as the world's second-biggest pensions market and it has been overtaken by Britain where pension assets have hit an all-time high, according to research. A decade ago, Japan boasted a pensions market more than twice the size of Britain's and second only to the United States. But low bond yield and a weak economy have seen assets creep up by just 11 percent in the intervening period. By contrast, the UK market has almost tripled. British pensions assets grew by over 13 percent in 2013 to more than 2 trillion pounds ($3.3 trillion), according to the Global Pensions Asset Study by consultancy Towers Watson, thanks to rallying stock mar- kets and a rise in UK government bond yields. The pace of growth in British pension assets last year highlights how the rising bond yields are helping schemes to recover after years of quantitative easing, which had pushed yields down and widened pension def- icits. According to the Pension Protection Fund, a watchdog, the aggregate deficit for 6,150 final salary pension schemes dropped to an estimated 27.6 billion pounds in December from 59.7 billion pounds in November. With smaller deficits to plug, corporations have more money available to invest in their businesses, potentially providing a boost to the British economy. “The recovery of the UK pensions systems has given the government, scheme sponsors and fiduciaries an important breathing space," said Chris Ford, head of investment for Europe, the Middle East and Africa at Towers Watson. UK pension fund allocation to equities, though down to 50 percent from 65 percent since 2003, is higher than in Japan and the Netherlands, where a more conservative strategy saw higher allocations to bonds, the study showed. “During 2013 equities enjoyed their best calendar year of risk adjusted return since the financial crisis," Ford said. “As a result many UK pension funds are in the best shape they have been for many years." The United States' pensions market, which allocates 57 percent of its assets to equi- ties, remains by far the largest in the world, with assets of over $18 trillion. UK pension assets as a percentage of GDP have almost doubled in the past ten years and stood at 131 percent in 2013, up from 67 percent in 2003, according to the Towers Watson study which was released on Wednesday. (Editing by Pravin Char). Reuters 06 February 2014 By Jemima Kelly and Tommy Wilkes

We trust you enjoyed the reading. Please give us your views at info@rfin.com.na or office@rfin.com.na

VOLUME 3, ISSUE 1 NEWSLETTER APRIL 2014

“The recovery of the UK pensions systems has given the government, scheme sponsors and fiduciaries an important breathing space," said Chris Ford

Photos contributed: Retirement Funds industry events

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ABOUT RFIN

The Retirement Funds Institute of Namibia ‘RFIN’ is a non-profit,

non-political organisation which represents and promotes the inter-

ests of the retirement industry in Namibia. Importantly, this includes

representing the retirement industry in negotiations with government

authorities (e.g. commenting on legislation affecting retirement

funds/pensioners), and as such, RFIN depends on the total support

of all parties concerned with the retirement benefit provision indus-

try. Our objectives are to protect, promote and advance the interests

of retirement funds, their trustees, members and persons associated

with such funds in Namibia; to be recognized as the legitimate repre-

sentative of the industry; to make RFIN more relevant to its mem-

bers (giving members value for money); to establish a benchmark

for training of Trustees; to elevate the level of the RFIN office; and to

broaden the RFIN member base and to ensure proper funding to

enable the achievement of goals.

RETIREMENT FUNDS INSTITUTE OF NAMIBIA

RFIN

The Village, Unit 5 Lilliencron Street, No

13 Eros Park Windhoek , Republic of

Namibia

P O Box 2649

Windhoek

Tel: +264 61 301 482

Fax; +264 61 301 483

E-mail: info@rfin.com.na

RFIN aims to protect, promote and advance the interests of our members. Our mis-sion is to scan the most important news and distribute them to our members for con-cise reading. The information contained in this newsletter does not constitute an offer or solicitation to sell any security or fund to or by anyone in any jurisdictions, nor should it be regarded as a contractual document. The information contained herein has been gathered by the RFIN from sources deemed reliable as of the date of publi-cation, but no warranty of accuracy or completeness is given. The Institute is not responsible for and provides no guarantee with respect to any information provided therein or through the use of any hypertext link. All information in this newsletter is for educational and information purposes and does not constitute investment, legal, tax, accounting or any other advice. RFIN reserves the right not to be responsible for the topicality, correctness, com-pleteness or quality of the information provided. Liability claims regarding damage caused by the use of any information provided, including any kind of information which is incomplete or incorrect, will therefore be rejected. All offers are not-binding and without obligation. Parts of the pages or the complete publication including all offers and information might be extended, changed or partly or completely deleted by the author without separate announcement. RFIN is not responsible for any contents linked or referred to from his pages - unless it has full knowledge of illegal contents and would be able to prevent the visitors of the site from viewing those pages. If any damage occurs by the use of information presented there, only the author of the respective pages might be liable, not the one who has linked to these pages? Furthermore the author is not liable for any postings or messages published by users of discussion boards, guestbook's or mailing lists provided on his page. Legal validity of this disclaimer: This disclaimer is to be regarded a part of the internet publication which you were referred from. If sections or individual terms of this statement are not legal or correct, the content or validity of the other parts remain uninfluenced by this fact.

Disclaimer

W e are on the W eB www.rf in .com.na

RFIN Board of Directors:

Melki Uupindi (Chairperson); Bonita de Silva (Vice Chairperson,)

Elvis Nashilongo; Neville Field, Sepo Lamaswala– Haihambo, Gerson

V Kamatuka

READER’S NOTES__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

To Protect, Promote and Advance

your Interest!

VOLUME 3, ISSUE 1 NEWSLETTER APRIL 2014