SA Open Provident Fund – Knights College Manco 14 June 2012

PRESENT: Ms. M McMenamin Manco Chairperson Ms. C Coode Manco Secretary

Ms. L Scott

Ms. F Potgieter (Joined the meeting at 10:00)

Ms. J Hattingh

Ms. Z Badsha Seshego Benefit Consulting

Mr. AS Crawford Seshego Benefit Consulting

APOLOGIES:

None

ACTION

1. / OPEN MEETING
1.1 / Welcome
Ms McMenamin opened the meeting and welcomed those present.
1.2 / Apologies
The Manco noted that apologies were tendered on behalf of Ms Potgieter, who would be joining the meeting late.
1.3 / Confirmation of agenda
The agenda as distributed prior to the meeting was confirmed.
1.4 / Declaration of interests and potential conflicts of interest
There were no disclosures or potential conflicts of interest to record.
2. / ADOPTION OF MINUTES OF THE MEETING HELD ON 24 NOVEMBER 2011
The minutes of the Manco meeting held on 24 November 2011, having been distributed and read, were adopted as a true record of proceedings, and the Chairperson was authorised to sign them.
3. / MATTERS ARISING FROM THE PREVIOUS MEETING
3.1 / (3.4) DC Everitt – Outstanding claim
The withdrawal form for Ms Everitt was still outstanding. Ms McMenamin commented that Ms Potgieter had spoken to Ms Everitt during the past weekend and had again requested her to complete the withdrawal form. Ms Everitt had indicated that she would collect the claim form from Ms Potgieter but to date the form had not been collected from Ms Potgieter. Ms McMenamin mentioned that Ms Everitt was experiencing personal problems, which could be a possible reason for the delays in completing the forms.
Ms Badsha advised that she had contacted Ms Everitt and explained that a benefit was due to her from the SA Open Provident Fund. She further commented that the claim forms were emailed directly to Ms Everitt. The committee noted that the administrator had confirmed that the completed claim form remained awaited.
Ms Scott made the committee aware that Ms Everitt had left the employer five years prior. Ms McMenamin enquired whether the benefit could revert back to the Fund. Mr Crawford explained that previously the rules of retirement funds allowed for unclaimed benefits older than three years to revert back to a fund but this practice had been changed in recent years. He advised that the unclaimed benefit would remain in the Fund until such time that Ms Everitt claimed her benefit. The committee noted that the matter would remain on the agenda until the benefit was claimed. / ZB
3.2 / (3.6) Members with benefits for the period 1997 to 2003
Ms McMenamin previously enquired whether the transfer values from Tennant were included in the members’ fund credits.
Ms Badsha advised that prior to the meeting on 24 November 2011 she had provided the committee with the following historical information which confirmed that the assets from Tennant were transferred to Glenrand MIB:
1.  Individual member transfer statements (as prepared by Glenrand MIB) confirming that the assets were transferred from the Christian Academy Retirement Fund to the MAPP Provident Fund.
2.  An extract of the benefit statement spreadsheet as at 1 January 2005 reflecting Opening Balance and transfers in.
Ms Badsha reported that following the meeting on 24 November 2011, she had approached Tennant to provide her with the Knights’ membership data and information in respect of the Section 14 transfer. She commented that, based on the information obtained, the following had been confirmed:
Original Section 14 values / R 1,098,948.81
Section 14 values at date of transfer / R 1,171,935.96
Members exited prior to approval / R 353,172.84
Initial Payment by Tennant into the Fund's bank account on May 2004 / R 804,000.00
Second Payment by Tennant into the Fund's bank account on 30 July 2004 / R 13,288.40
Third Payment by Tennant into the Fund's bank account on 20 June 2005 (Note: an additional R69.01 was paid for interest from 1 August 2004 to date) / R 1,474.72
Total payments (tied back to the members’ Section 14 values) / 1,171,935.96
The committee agreed that the matter could be considered finalised and removed from the agenda.
Ms McMenamin mentioned that previously there was concern with the amount of the benefits as there was an expectation that the benefits should be higher given the number of years of service. Mr Crawford explained that he had been led to understand that for a period the Fund had shares in Regal Bank which resulted in a significant loss for the Fund. This meant that members (which included the members’ of Team@Westwing) suffered a significant reduction in the value of their benefit.
3.3 / (3.7) Appointment of new administrator
3.3.1 / Monthly pre-billing schedules
Ms Badsha commented that it was previously agreed that Ms Laubscher would continue to receive the pre-billing schedules on a monthly basis from the administrator, Sanlam. She further explained that the pre-billing schedules were sent out on a monthly basis to assist Sanlam and the employers with the allocation of contributions speedily.
Ms Coode pointed out that she uploaded the contribution schedule online to Sanlam system, and to date had not made use of the pre-billing schedule.
3.3.2 / Retirement fund website
At the previous meeting it was noted that Ms Laubscher received ongoing requests from members for their fund credit values and it was requested that Ms Laubscher send a reminder to the members requesting that they register on the retirement website. The committee could not recall whether a reminder was sent to members.
Ms Badsha undertook to forward the communication on the website registration to Ms Coode for distribution to members. / ZB
3.3.3 / Payroll training
Ms Badsha confirmed that Mr Mahomed Khan from Sanlam provided payroll training to Ms Coode and Ms Hattingh on 27 January 2012.
3.4 / (3.11) Housing Loans
At the previous meeting, Ms Potgieter raised her concern with ABSA’s integrity given her recent interaction with them. She previously explained that when she informed the ABSA employee (who was handling her application) that she was unable to obtain a witness to sign the agreement; the consultant explained that it was not necessary as ABSA “made a scribble” to replace signatures when witnesses did not sign the agreements. Ms Badsha reported that the matter had been raised with the Board of trustees at the meeting on 9 December 2011. Furthermore, at the trustee meeting on 11 June 2012, the trustees reached the conclusion that the housing loan process was a low risk exposure area and agreed that the process would be documented to ensure future compliance.
Ms Coode mentioned that on a monthly basis she received a payment schedule from ABSA. She raised concern that the repayment did not correspond with the amount that Knights College deducted from Ms Potgieter’s salary and paid to ABSA. Mr Crawford commented that in general the repayment would only change when the interest rate changed, and these numbers needed to reconcile or the member would possibly fall into arrears.
Ms Hattingh pointed out that there was a delay with the first repayment which may have resulted in a shortfall being carried forward each month. Mr Crawford advised that the short payments/arrears needed to be address with ABSA and suggested that a reconciliation of the payments be obtained from ABSA for further investigation. Ms Coode undertook to forward the monthly schedule received from ABSA to Ms Badsha for assistance with her investigation. / ZB
CC
3.5 / (4.1) Administration Report as at 30 September 2011
3.5.1 / Payment to C Thompson
Ms Badsha reported that Sanlam had confirmed that Ms C Thompson’s payment had been made on 3 October 2011. Ms Coode explained that the payment had been previously rejected due to the incorrect bank account number on the withdrawal claim form and was then only paid in 2012. Ms Badsha undertook to investigate the discrepancy in the payment dates with Sanlam. The matter was discussed further under item 4.1. / ZB
3.5.2 / Unclaimed benefit (RC Everitt) amount to be reflected on administration report
Ms Badsha confirmed that the benefit amounts for unpaid/unclaimed benefits were reflected on the administration report.
3.6 / (4.2) Cash Flow Report – Refund of bank charges to be allocated to members
The committee noted that the refund of the bank charges had been received from ABSA on 17 November 2011 and was allocated to members on 15 December 2011.
3.7 / (5.1) Presentation of retirement fund at Orientation on Friday, 6 January 2012
Ms Badsha advised the committee that she provided a presentation on the SA Open Provident Fund at the Knights College orientation session held on Friday, 6 January 2012. Furthermore, she provided a presentation on the Fund to the five new entrants on 14 May 2012.
4. / MANCO REPORTING
4.1 / Administration Report as at 31 March 2012
The committee reviewed the administration report as at 31 March 2012 and the following was noted:
1.  The market values of the fund were noted as follows:
Portfolio / Market Value / Exposure (% of Fund)
CPI + 7% / R 963,480 / 20.20%
CPI + 5% / R 2,559,889 / 53.65%
CPI + 3% / R 210,435 / 4.41%
Money Market / R 1,037,312 / 21.74%
Total / R 4,771,116 / 100%
2.  The committee noted the Section 13A reports for the period 31 January 2011 to 29 February 2012. Ms Badsha reminded the committee that, in terms of Section 13A of the Pension Funds Act, contributions must be deposited into the Fund’s bank account prior to the 7th of the following month for which they were due and the schedules must be received by the administrator by the 15th of the following month for which they were due. It was noted that the contributions for September 2011 were received on 29 October 2011. Ms Hattingh could not recall the reason for the delay in payment and Ms Badsha undertook to investigate the matter.
Ms Badsha pointed out that Sanlam invested the contributions within 5 working days of receipt of the contributions and schedule. Mr Crawford encouraged the provision of the contribution schedules ASAP, since these were usually available once the monthly payroll had been completed.
3.  It was highlighted that the closing balance of the contingency reserve as at 31 March 2012 was R18,670.17.
4.  The committee noted the benefits paid and benefits payable as at 31 March 2012. Ms Badsha pointed out that the report stated that CL Thompson claim was processed on 29 September 2011. As discussed under item 3.5.1, Ms Badsha undertook to confirm the date of the actual payment.
Ms Scott questioned whether the committee needed to be concern that the payment date on the report was 29 September 2011 even though the payment was only in 2012. Mr Crawford commented that the report was probably indicating the date that the payment was first attempted. He further mentioned that the monies were rolled up with bank interest until date of payment.
5.  Ms Coode raised her concern that the Sanlam online system did not require her to upload a copy of the member’s bank statement and identity document when uploading claim forms. She questioned whether Sanlam was verifying the banking details on the forms. Mr Crawford stated that it was possible that Sanlam performed bank validations on the banking details but commented that it was worrisome if this was not happening. Ms Badsha undertook to obtain clarity from Sanlam. The committee agreed that the banking details needed to be verified.
6.  The committee enquired about the status of the disability claim for Ms Esterhuyse. Ms Badsha reported that Ms Esterhuyse was receiving a monthly disability benefit from Momentum Employee Benefits with the next review due April 2013. Ms Coode requested that Ms Badsha send her confirmation that Ms Esterhuyse’s benefit was continuing. / ZB
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4.2 / Cash Flow Report as at 31 March 2012
The Manco reviewed the cashflow statement as at 31 March 2012 and no queries were raised. Mr Crawford commented that the SA Open Provident Fund differed from the typical umbrella fund in that each participating employer had their own bank accounts and investment portfolios which ensured that the monies of the different employers were not comingled. He highlighted that this ensured visibility and transparency which would allow the committee to identity problems and errors by the administrator. The Manco was requested to check the monthly reports for errors with Knights College monies.
4.3 / Investment Reports as at 30 April 2012
No queries were raised with regards to the investment reports as at 30 April 2012.
5. / NEW ITEMS
5.1 / Contingency reserve
The committee was advised that Sanlam and the Fund secretary, Ms Randles, were in discussions to finalise the 2012 contingency reserve provision. Once the contingency reserve provision was finalised, a letter confirming the monthly provision would be sent to the Manco. Ms Badsha reported that the contingency reserve provision would be used to cover ad hoc expenses such as audit fees, FSB levies, consulting fees, bank charges and etc.
Mr Crawford explained that the employers participating in the Fund benefited from certain economies of scale. / ZB