19 Jan Benefits of outsourcing pension fund management
Managing a retirement fund is onerous and any reduced oversight through stretched resources adds an unwanted layer of risk. Increasing pressure on costs and time mean that internal resources of ten must deal with extra work that is beyond their experience and expertise, especially as legislation changes. These factors make it difficult to manage key functions such as facilitating trustee meetings, responding to member queries, and arranging trustee training.
The less obvious risk of managing retirement funds in-house is the issue of succession planning and providing continuity of governance to manage risk, achieve value for money and ensure the best possible results for employee members.
The benefits of outsourcing retirement fund management are clear, especially in these times, but the schemes should consider a few factors before making an appointment:
- Is there a cultural fit?
- Can the provider improve performance?
- Does the provider possess the knowledge and experience?
- Do they have the services needed (or will they outsource to another party?).
- Is there a sense of forward-thinking so that you remain relevant?
The last question is perhaps irreverent, but do you like them? Do you think that you can work with them?
Wimpie Vermaak
Senior Manager: New Business Development
Salt Employee Benefits
vermaakw@salteb.co.za
salteb.co.za