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Covering all the News & Insights

for pension professionals

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A continental perspective on Pensions

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AFRICA FOOT PRINT

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PA: Kindly share with our readers a brief background about yourself and specifically in relation to the pensions and retirement industry.

LM: I have worked in the financial industry for 20 years. My first role in the pensions sector was in 2002, when I joined the Transnet Retirement Fund as an investment manager. Since then, I have had the privilege of working in various other roles, including heading the Investments and Actuarial function at the Government Employees Pension Fund, which was my most recent role before I joined the Eskom Pension and Provident Fund in 2019. My academic qualifications are in Finance and Economics.

PA: You have recently been appointed the new CE and Principal Officer of EPPF. What are your key priorities and strategies going forward to ensure the fund achieves its goals and executes its mandates.

LM: The EPPF holds the vision of becoming the most admired pension fund - by its members and its peers. To this end, the Fund has set itself the following strategic objectives:

Grow the confidence of our members by ensuring the sustainability of the Fund
Build our platform to serve better
Deliver member- centricity through operational excellence
Unlock the talent of our human capital
Earn trust in our brand and reputation

PA: EPPF is one of the largest funds in South Africa and by extension Africa. What are some of the key milestones that you can share in the history of the fund

LM: The EPPF was established in 1950. This year, the Fund turns 70 years old.
In 2014 the Fund’s assets under management surpassed R100 billion for the first time. In 2019, the Fund was awarded the Obama-Mandela Bridge Builder of the year 2019 by NASP (National Association of Securities Professionals).The Fund was included in the inaugural PRI Leaders’ Group in 2019, in recognition of its responsible investment practices.

PA: Can you provide us with a breakdown of EPPF’s current standings in terms of total AUM’s, allocations  and membership

LM: The EPPF has more than 33,000 pensioners, and around 43,000 active-members. The Fund also provides services to more than 5,000 deferred pensioners and beneficiaries. Total assets under management are around R140 billion (USD 10 billion).

The Fund’s (Current) strategic asset class allocation is as follows:



PA: This edition of Pensions Africa is on Alternative Investments. Has EPPF invested in alternatives locally or offshore. Share some details.

LM: The EPPF has been investing in private equity funds for more than 10 years. Around 4% of the Fund’s AUM is invested in private equity, mostly in South Africa through limited partnerships. The Fund has some exposure to private equity funds investing across Africa. Our investments also include hedge funds and physical property.

PA: Can you share EPPFs investments allocations  into the rest of Africa and globally. Which sectors and asset classes dominate your investments and why?

LM: The Fund’s offshore allocations are mostly into listed equities and are managed by external asset managers on behalf of the EPPF. Nearly 30% of the Fund’s assets are invested in the global markets, both developed and emerging markets.

The strategic asset allocation allows for 5% of the Fund’s assets to be invested in Africa (excluding South Africa). Actual investments deployed in the region amount to 3%.

PA: Given your experience in the Pensions Industry, what are some of the key and fundamental considerations to ensure retirees and members retire comfortably.

LM: Retirement funds should consist of growth assets (e.g. equities) and capital preservation assets (e.g. bonds). The optimal combination differs for each fund, depending on its membership and objectives. It’s important that funds do not invest too conservatively – thereby preserving capital but not growing, or too aggressively, in which case more risk is taken than the fund can afford.

Most young people entering the workforce do not think much about retirement, as it seems too far off into the future, but getting into a savings discipline can make all the difference when one ultimately reaches retirement age. It’s never too early to start thinking about one’s income replacement ratio, which is income in retirement divided by income while still working. Financial advisors usually recommend targeting a replacement ratio between 60% and 80%.  The worst mistake that people make is withdrawing and cashing in their pension benefit when they resign from an employer.



PA: Governance within pension funds is a topical issue across Africa. To safeguard and ensure retirees future Is secured and protected; funds have been urged to implement strict governance and compliance procedures. How has EPPF dealt with challenges relating to governance and compliance

LM: The Fund is regulated by the Financial Sector Conduct Authority (FSCA) according to the Pension Funds Act of 1956. The Fund continues to review and improve its Governance Framework to ensure that the Board and its sub-committees have appropriate oversight and decision-making authority.

PA: Technology and digital innovations are critical as the world moves to embrace the fourth industrial revolution. What are some of the technological innovations that you have deployed as a fund to ensure better efficiencies, mitigate risk with a focus on improving returns.

LM: We are in the process of improving our benefit administration systems, so that more processes can be automated which will improve our efficiency and delivery to Fund members and pensioners. We also want to introduce more self-service functionality for our members.


PA: In South Africa, the issue of prescribed assets has been discussed, albeit in hushed tones. What are your views on such a proposed policy change on the government to re-introduce some sort of prescribed assets to funds in future.

LM: My view is that if all stakeholders played their role in the development of the South African economy, there would be no need for prescribed assets. Investments in infrastructure are well aligned to the liability profile of a pension fund; and offer good diversification benefits.

PA: Trustees have a mammoth task of making critical decisions on behalf of funds. In your own opinion, do you think trustees as currently appointed and constituted, the skill sets they bring and the tenures they receive are sufficient to enable them to execute such critical functions on behalf of fund members?

LM: Research often shows that diversity on boards of companies can add long-term financial value. I believe it’s the same with boards of trustees; the diversity of views can offer useful insights. I also believe that boards should be supplemented with independent members who are experts on legal, investment, and financial matters. While the fiduciary duty rests with the board, members might not have expertise in certain areas that are critical to the effective governance of pension funds.

PA: Has EPPF ventured into impact investing given recent developments suggesting that funds are obliged to consider ESG factors In all their investment decisions. If so, in what sectors has EPPF deployed impact capital.

LM: The EPPF has deployed impact capital through investments in road infrastructure, clean energy, education, and healthcare.

PA: Finally, in your own opinion, how can South Africa and Africa to a large extent deal with issues of low pension coverage and old age poverty within their respective jurisdictions and pension schemes.

LM: It starts with financial education, which empowers individuals to make wise financial decisions, keeping the long-term in mind. Governments can offer tax incentives on retirement savings, and create national pension schemes. However, these interventions depend on higher employment rates, solid fiscal revenues and sustained economic growth.  



Linda Mateza: is the Chief Executive and Principal Officer of the Eskom Pension and Provident Fund (EPPF).
Linda holds a Master’s degree in Finance and Investments from the University of Witwatersrand, and is a Fellow of the Africa Leadership Initiative.
She serves on the Board of Directors of Batseta, the Council of retirement funds in South Africa.

Interview by Stephen Munyao / Editor and head of Content-PensionsAfrica

Published in Latest Articles
Monday, 09 September 2019 11:32

Women excel in the retirement industry

 The Pensions Industry has historically been predominantly a male dominated sector in South Africa, but a few women have taken up the challenge and excelled. This Women’s month, we profile a few of them to highlight the fact that, despite the challenges-women can excel and rise up to leadership positions in any industry of their choice.


Dr. Renosi Mokate- GEPF / Executive Chairman at Concentric Alliance (Pty) Ltd

Dr. Renosi Mokate is a highly experienced economist and policy analyst of international repute, specialising in development economics and finance. Renosi gained her academic qualifications in the United States of America, where she was based during her early academic career. She returned to South Africa in the early 1990s, serving in the multi-party negotiations process and as Chief Executive of the Independent Electoral Commission in the run-up to South Africa’s first democratic election in 1994.

Dr. Renosi Mokate- GEPF / Executive Chairman at Concentric Alliance (Pty) Ltd

She became a key adviser on macro-economic and fiscal policy to the Government, and later Chief Executive of the Central Energy Fund (the South African Government’s State-owned energy exploration, production, refining, and investment group). She was Deputy Governor of the South African Reserve Bank between 2005 and 2010, and a key member of the Monetary Policy Committee and the G20 Group of Nations Central Bank Forum.nosi left the Reserve Bank to become an Executive Director of the World Bank Group, based in New York, where she represented the interests of Angola, Nigeria, and South Africa at Board level. Since joining Concentric Alliance, Renosi has primarily been involved in strategy planning on behalf of clients, where her twenty years of experience at the highest levels of policy formulation in South Africa, and internationally, come into full play.

Q: Do you think there has been sufficient transformation in terms of gender within the retirement industry in South Africa?

A: “Progress has (been) made with respect to gender transformation, driven primarily by the country’s legal and policy frameworks on employment equity and Broad-Based Black Economic Empowerment, which require companies to take into account gender equity when employing staff and appointing executive and non-executive directors on their Boards. In addition, the Independent Institute of Directors and other similar bodies have reinforced the message the companies that are gender diverse perform better than those that are not.

However, more needs to be done throughout all the facets of the industry, namely asset owners, institutional investors and the pension service industry. The extent of gender representation within the pension industry is impacted by the generally low representation of women in the financial sector, particularly at the decision-making level. This is also the case in the areas that are peculiar to the industry, such as investment analysis and actuarial sciences.

It is important that the pension industry develop focused strategies for building a pool of skilled professionals and non-executive directors, if progress is to be made. In doing so we must also keep in mind that transformation is not just about numbers; it is also about changing the culture of the organisations in the industry and ensuring that the services that we offer support gender transformation throughout our society”.


Mabatho Seeiso- Independent Professional Trustee

Mabatho joined the Financial Services Industry at the beginning of 2001 in private equity as an Assistant Portfolio Manager for Infrastructure Investments at Old Mutual Asset Management. In 2003 she joined Cadiz Asset Management and subsequently became a Director and Head of Institutional Business Development until March 2007.

Mabatho Seeiso- Independent Professional Trustee


Mabatho now serves as a professional and independent trustee on several Boards of Management of Pension Funds. She also serves as Chairperson in some of the Funds or their Investment Committees. During her 11 years as a trustee she has had an opportunity to serve on a variety of funds including umbrella funds, parastatal funds, union funds, an unclaimed benefits fund, a beneficiary Fund and a Government Fund. She is also an independent investment committee member of the Jobs Fund. She has a passion for ensuring that we do our best for members of funds. She is also passionate about advocating for impact investing as it benefits both members and the economy. She was recently appointed as the Chair of the Investment Committee of the Truck Stops Private Equity Fund.

Mabatho’s past work experience includes working in sales, industrial development and international trade. She has also worked as a New Business Development Manager for Total SA and in management consulting for five years. She also has experience serving as a Non Executive Director on Company Boards and is a member of the Advisory Committee of the Southern African Pension Fund Investment Forum.
For 10 years, Mabatho engaged in her passion which was to facilitate the true empowerment of individuals with specific focus on women. She has been involved in teaching and facilitating personal development and the acquisition of self-leadership skills for women since 2008. She began women in financial services dialogue sessions in 2008 that ran for two years. She has worked as a professional mentor and public speaker who was facilitating leadership circles for 10 years. Her qualifications include; Honours (Economics and Marketing) University of Wales, Aberystwyth College, Honours (Financial Analysis and Portfolio Management) University of Cape Town and an MBA from Hull University.

Q: Do you think there has been sufficient transformation in terms of gender within the retirement industry in South Africa?

A: “There is still significant work that still needs to be done in developing gender diversity in the retirement fund industry. We need more women decision makers”.


Q: What would you highlight as your greatest contribution to the retirement industry in South Africa?

“I honestly believe that my biggest contribution has been getting my boards to appreciate the impact of our decisions on our members. The ability to stand in someone else’ shoes and to have empathy has been important to staying focused on what is in the best interest of members. It does not mean we always get it right but I think that is an important basis from which to make decisions. It also means you have to show courage sometimes to say things that are unpopular. The fact that I have been serving on a variety of pension boards since 2008 means I bring a depth of knowledge and industry insight to decision making.

I have also now become an advocate of impact investing on boards as a result of listening to what many members are saying is important to them. They want to retire in an environment with good infrastructure which includes good health care and education facilities; in an economy that is robust and that will provide jobs for their children. This is part of their definition of having a meaningful retirement”.


Mantuka Maisela- Chairman of the Fund, Eskom Pension and Provident Fund ((Eppf)

Since 2017 Mantuka has been the Chairman of the Fund at Eskom Pension and Provident Fund where she is also a member of the Human Resources and Remuneration Committee as well as the Strategic Investment Committee.

Mantuka Maisela- Chairman of the Fund, Eskom Pension and Provident Fund ((Eppf)

Mantuka has also been a trustee and has sat in various committees and boards of the following organisations- PetroSA, South African National Parks, Air Traffic and Navigation Services, National Consumer Council, MERSETA, Motor industry bargaining council, GEPF, Motor industry fund, Medshield medical scheme, Deloitte Best Company to work for Committee, PetroSA Egypt,World Petroleum council, Murray & Roberts among others.

She has served as an Executive for various organizations, amongst them, Vice President at PetroSA Group Human Resources at Murray and Roberts Holding as well as RUC Holdings.

Maisela is also the CEO of Khomolema Consulting and her qualifications include a Masters degree in Management from Wits University, Post Graduate Diploma in Management from Wits, Production Management Diploma ( Kyushu, Japan), Masters in Management (Wits) and has also attended a Leadership development programme from Wharton business school, University of Pennsylvania.

Professionally she holds membership to the following bodies-Member of the Society of Human Resources Management (SHRM,USA), Member of The Association of Training and Development (ATD, USA)and Fellow of The Institute of Directors of South Africa.
Mantuka has extensive experience and commands a lot of respect in both business and the pension fund industry.

 

Q: Do you think there has been sufficient transformation in terms of gender within the retirement industry in South Africa?

A: “The industry has attempted to provide opportunities to previously disadvantaged Asset Managers some of whom are women. However, there is still a lot of work to be done to ensure that gender representation is given special attention. The EPPF (has) established a Manager Development program to empower young Black Asset Manager(s) , some of which (were) women by allocating Assets to them and to grow their Businesses.

They (Asset managers) were provided the necessary assistance and (were) paid fees (to) enable them to buy the necessary equipment to operate their business as well as employ highly qualified Asset Managers that will grow the Businesses. We are continuously (..trying to) empower more women in the industry. The industry need(s) to consider imposing targets specifically for women empowerment in the industry”.

Published in Latest Articles