NFMW wins awards, Unitisation a Switching webinar and Funeral cover for your extended family members

Good day,

I trust that you are all keeping well.

It gives me great pleasure to announce that the NFMW has won a total of five Institute of Retirement Funds Africa (IRFA) Best Practice Industry Awards for the year 2019/20.

• Best in Class - Investment Practices
• Best in Class - Governance
• Best Practices in Transformation
• Best Practices in Financial Management and Reporting
• Best Practices in Stakeholder Engagement and Education

This is an annual competition open to all retirement funds where various funds showcase their own practices in managing a retirement fund and these are assessed against industry benchmarks and industry best practices. We are proud to have received these awards and thank all our stakeholders for their support as we continue to set the Benchmark of Excellence in the Local Government retirement fund industry.

For the NFMW to remain competitive in the pension funds industry, it is crucial to continually review existing business processes to ensure that members are experiencing the best possible service delivery. Currently, investment returns are declared by means of bonuses that are calculated by the fund’s actuary on a monthly basis. The bonus rate declared represents the net investment return in respect of the previous month’s investments. This unfortunately causes delays in certain business processes e.g. benefit payments and portfolio switches. Therefore, the fund will be converted to operate on a fully unitised investment and administration platform from the middle of August 2020. In a unitised fund, benefit values are real-time and you can read more on this later in this mailer. Please also watch the latest webinar on investment portfolio switching and the negative long-term impact of an emotional switch at the "wrong time".

As a fund we understand that the COVID-19 pandemic has not only affected our members, but their family members as well. The fund makes provision for a funeral benefit to be paid out in the case of the death of a member, a member's spouse or registered life-partner as well as qualifying children. We do, however, understand that these family members are not always the only family members who require funeral cover and are dependent on the member. NFMW-members are able to cover their extended family members by means of voluntary funeral schemes available through Sanlam and Kgatso Funerals. Details on these products are provided below.

The Board of Trustee elections are well underway and members are reminded of the deadline, 14 August 2020, for the submission of nomination forms, should they wish to nominate a candidate in their respective provinces. The documentation can also be downloaded by clicking here.

Please remember, we are always here to help if you need any information or assistance with a fund-related query.

Kind regards and stay safe!

Leslie Ndawana
Principal Executive Officer

UNITISATION

The fund will be converted to a fully unitised investment and administration platform to ensure that the NFMW continues to provide the highest quality of member-experience.

This new strategy will allow the fund to calculate members' returns on a daily basis.

When will this come into effect? The fund's administrative processes will enter a two-week freeze period from 1 August 2020, effectively. This is to ensure that all assets, liabilities and unit prices on the administration system are matched with the assets, liabilities and values of the Asset Consultants. Members will still be able to view their benefit statements online during the freeze period.	Will the implementation date of a member’s investment switch still be effective on the first day of the following month or will it be done as soon as the new portfolio/s is elected? Investment choice switches can be processed within 5 to 7 days from the day a correctly completed Investment switch instruction-form has been received by Sanlam.
The fund used to declare returns on a monthly basis; how will interest be added to the member’s fund credit with unitisation? Interest will be integrated into the daily calculated unit price. In a unitised fund, benefit values are real-time (unit prices are updated daily, usually with a 2-3 day delay).	Will members be able to effect a switch on the Sanlam online platform Yes. However, we will first need to arrange to open this up to members. It will take 3 – 5 working days to activate the online functionality as soon as the unitisation implementation has been completed.
With daily unit pricing, does the member's benefit fluctuate on a daily basis? How will the member be able to monitor investment growth on his/her benefit, i.e. how will this reflect on theSanlam online platform and benefit statement? Yes, benefits will fluctuate on a daily basis and the benefit values displayed will be real-time. Members will still be able to monitor their investment growth by means of the Sanlam online platform and benefit statement.	Day to day fluctuations in a member’s fund credit may lead to emotional switching; any word of advice to our members on this? It is understandable that daily fluctuations in a member’s fund credit may lead to uncertainty and emotional switching, which may cost members dearly when making uninformed decisions. Members are therefore reminded to consult with a financial advisor first, before making any investment choices. Remember, a retirement fund is a long-term savings vehicle!

Members used to have to wait for the monthly returns to be declared before a benefit payment could be paid, will unitisation speed up the payment process?

Yes. By implication, when the claim documents are in order, the Administrator should be in a position to finalise benefit payments within as little as 7 - 10 working days after all claim documents and contributions have been found in order and the member’s service with the employer was terminated.

Our staff continues to work remotely to ensure the minimum disruption and to continue with service delivery. There will therefore be no delays in the processing and payment of claims, once ALL the required documentation and information have been submitted to the fund. All claims documentation and monthly schedules must still be submitted to the relevant Fund Administration Officer.

Watch the webinar on switching and making the right choices

VOLUNTARY FUNERAL COVER AND BURIAL PACKAGES

NFMW-members have the option to make use of any of the voluntary funeral benefits, which include:

• Burial packages structured to your individual needs (Download brochure & Application form)
• Funeral cover for parents, parents-in-law and up to eight extended family members (Download brochure & Application form)
• Funeral cover conversion option which allows members to continue with their funeral cover when they resign, are retrenched or retire (Download application form).

These products are voluntary and, should any of the products be taken up by an NFMW-member, the relevant agreement will be between the member and the service provider and falls outside the rules of the fund. The number of family members you wish to insure and the amount and type of cover/burial package you choose, will determine the monthly premium payable to the external service provider by direct debit order. Please refer to the brochures above for costs and the applicable policy terms and conditions

LATEST INVESTMENT PORTFOLIO RETURNS

The table shows the most recent return declarations up to 30 June 2020.

#Ways to save campaign

An initiative by the South African Savings Institute (SASI) and ABSA focusing on financial education through a #waystosave webinar series. Find out more