Annual General Meeting


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  • Perhaps give example of Allan Gray fees where we charge member 0.65% where other funds charge their members 1% and upwards.
  • Annual General Meeting

    1. 1. EVERGREEN RETIREMENT FUNDS Annual General Meeting Cape Town 20 June 2007
    2. 2. AGENDA <ul><li>Welcome (Marius le Grange, Old Mutual) </li></ul><ul><li>2006 AGM minutes for information </li></ul><ul><li>Chairman’s Report (Chris Liddle) </li></ul><ul><li>The future Trustees (Chris Liddle) </li></ul><ul><li>Report back from Sub-Committees (Chris Liddle) </li></ul><ul><li>Financial Overview for year ended 31-12-2006 (Tracy Landers, Old Mutual) </li></ul><ul><li>Questions </li></ul><ul><li>Close </li></ul>
    3. 3. CHAIRMAN’S REPORT <ul><li>The SA Retirement Fund Industry </li></ul><ul><li>Retirement Fund Tax </li></ul><ul><li>Risk Management </li></ul><ul><li>Composition of the Management Board </li></ul><ul><li>Actuarial Valuation </li></ul><ul><li>Fund Expenses and Fees </li></ul>
    4. 4. The SA Retirement Fund Industry <ul><li>National Treasury’s 2nd Discussion Paper on Social Security & Retirement Reform </li></ul><ul><li>Heartened by specific reference to: </li></ul><ul><ul><li>good governance, </li></ul></ul><ul><ul><li>transparency, and </li></ul></ul><ul><ul><li>cost-effective administration </li></ul></ul>
    5. 5. Retirement Fund Tax <ul><li>1 March 2007 </li></ul><ul><li>Abolishment of 9% tax on - interest - offshore dividends - property rentals </li></ul>
    6. 6. Risk Management <ul><li>Developed mandates of Board Sub-Committees in line with Board’s view on risk management </li></ul><ul><li>Governance process based primarily on its duties in terms of the Pension Funds Act </li></ul><ul><li>‘ Risk-based management’ </li></ul><ul><ul><ul><li>vs </li></ul></ul></ul><ul><li>‘ good governance’ & ‘risk management’ </li></ul><ul><li>2007: Sub-Committees to assess risks & formulate mitigating strategies </li></ul>
    7. 7. Composition of the Management Board <ul><li>Review of structure of Boards </li></ul><ul><li>1 st three-years term ended November 2006 </li></ul><ul><li>New Management Board: - Independent Trustees: Chris Liddle, Jeremy Andrew (existing), Wahida Parker & Shirley Mabusela (future) </li></ul><ul><li>- Tied Trustees: Ozzie Osman (existing) Bertie van Wyk, Pierre Pretorius & Judy Faure (future) </li></ul><ul><li>- Principal Officer: Cheryl Mestern </li></ul><ul><li>Mickey Lowther & Jonathan Mort resigned due to work commitments </li></ul>
    8. 8. Actuarial Valuation <ul><li>Valuation conducted as at 31 December 2005 </li></ul><ul><li>Both Funds in a sound financial condition - - Pension Fund: small surplus of 0.1% - Provident Fund: marginal deficit of 0.1% </li></ul><ul><li>Reconciled discrepancies between assets & obligations arising from timing of admin & asset-manager systems, and use of pricing model to assign expenses and retirement fund tax </li></ul><ul><li>After valuation date, pricing model replaced by approach that took all expenses and tax into account. Profits and losses subsequently realised for exited members, no adverse affect on Funds </li></ul>
    9. 9. <ul><li>Fund expense fee of R5.00 (no VAT) – unchanged in 2007 </li></ul><ul><li>Deducted from members’ accumulated credits </li></ul><ul><li>Used to meet Fund expenses, (including Trustees & Principal Officer fees) </li></ul><ul><li>Set-up phase: </li></ul><ul><ul><li>insufficient to cover costs </li></ul></ul><ul><ul><li>Old Mutual subsidises to prevent future members paying current expenses </li></ul></ul><ul><ul><li>2006 subsidy approx R1.5m </li></ul></ul><ul><li>Package option fees – unchanged in 2007 </li></ul>Fund Expenses and Fees
    10. 10. THE FUTURE TRUSTEES <ul><li>INDEPENDENT TRUSTEES </li></ul><ul><li>Chris Liddle </li></ul><ul><li>Jeremy Andrew </li></ul><ul><li>Shirley Mabusela </li></ul><ul><li>Wahida Parker </li></ul><ul><li>TIED TRUSTEES </li></ul><ul><li>Judy Faure </li></ul><ul><li>Ozzie Osman </li></ul><ul><li>Pierre Pretorius </li></ul><ul><li>Bertie van Wyk (Chairman) </li></ul>
    11. 11. Independent Trustees <ul><li>Chris Liddle (Outgoing Chairman) </li></ul><ul><li>Current Chair of the Evergreen Pension and Provident Funds </li></ul><ul><li>Spent over three decades in the Life and Employee Benefits divisions of Southern Life, departing in 1998 as Executive Director of both divisions </li></ul><ul><li>From 1999, served as an Independent Trustee on Boards of Retirement Funds sponsored by Old Mutual, including Evergreen Retirement Funds </li></ul><ul><li>Among other positions, Director and Chair of Galaxy Investment Trust and BoE Link Nominee companies, as well as Director of Catalyst Employee Benefit Consultants </li></ul>
    12. 12. Independent Trustees (cont.) <ul><li>Jeremy Andrew </li></ul><ul><li>Internationally respected pension-fund actuary who has been closely involved with legislative and regulatory developments affecting retirement funds in South Africa. </li></ul><ul><li>Qualified valuator of every type of retirement fund, worked at Liberty Life from 1977 to 1988. </li></ul><ul><li>In 1998 became Chief Actuary to the Financial Services Board, where he helped draft surplus-apportionment and minimum-benefits legislation. </li></ul><ul><li>Past member of the Actuarial Society of South Africa (ASSA) and currently serves on the ASSA’s Professional Conduct Committee. </li></ul>
    13. 13. Independent Trustees (cont.) <ul><li>Wahida Parker </li></ul><ul><li>Has been Independent Principal Officer of Verso Umbrella Fund, Member of Consumer Tribunal Western Cape, Director (non-executive) of HWB Communications, Work Dynamics and The Arbitration Forum (Pty) Ltd </li></ul><ul><li>Former Executive Member of both the Black Management Forum Western Cape and Black Lawyers Association Western Cape </li></ul><ul><li>Independent Trustee of Old Mutual Pristine Retirement Fund </li></ul><ul><li>B.Proc in 1985, Higher Diploma in Corporate Governance </li></ul><ul><li>Certified Forensics Examiner in the field of forensic auditing and liquidator with Master of Supreme Court </li></ul>
    14. 14. Independent Trustees (cont.) <ul><li>Shirley Mabusela </li></ul><ul><li>Trustee and Board Member of Centre for Education Policy Development, Freedom Park Trust, Human Rights Institute of South Africa, Nelson Mandela Children’s Fund and Centre for Human Rights of the University of Pretoria </li></ul><ul><li>Chair of HydoWSA, consortium of women-owned companies that focus on renewable energy and mining </li></ul><ul><li>Former Chair of the South African Human Rights Commission </li></ul><ul><li>Holds a BA Social Work Degree from the University of the North, as well as a Management Diploma and Postgraduate Diploma in Advanced Social Work Practice from Wits </li></ul>
    15. 15. Tied Trustees <ul><li>Judy Faure </li></ul><ul><li>Old Mutual Actuary and Fellow of the Institute of Actuaries </li></ul><ul><li>Risk Benefits Consultant to Union-sponsored funds & Fund Actuary to several Union Provident Funds from 1996 to 2000 </li></ul><ul><li>Honorary Secretary of ASSA from 2000 to 2004 </li></ul><ul><li>From 2004 to 2006 chaired both Old Mutual Staff Retirement Fund and ASSA’s Actuarial Governance Board Task Team </li></ul><ul><li>Appointed Actuary to two Old Mutual life companies, namely OMLAC (Bermuda) and OMLAC (Namibia) </li></ul>
    16. 16. Tied Trustees (cont.) <ul><li>Ikhraam (Ozzie) Osman </li></ul><ul><li>Senior Manager responsible for Old Mutual’s Islamic Product Solutions and Member Support Services; pioneered Old Mutual’s entry into Islamic Financial Services </li></ul><ul><li>Head of Department of Economic Affairs and Tourism in the Free State Provincial Government from 1995 to 1997 </li></ul><ul><li>Joined Old Mutual as Strategic Marketing Manager for Employee Benefits in 1997 </li></ul><ul><li>Holds an Honours B. Comm. and a Wits MBA </li></ul><ul><li>Serves as Trustee on several Old Mutual-sponsored retirement funds </li></ul>
    17. 17. Tied Trustees (cont.) <ul><li>Pierre Pretorius </li></ul><ul><li>Member of the Old Mutual Employee Benefits EXCO since 2004 </li></ul><ul><li>Started his career as an attorney, following which he became a Senior Legal Adviser to Transnet in 1984. By 1993 he was Transnet’s Chief Legal Adviser and a member of the Board of Trustees of the Transnet Pension Fund </li></ul><ul><li>In 1996 became Principal Consultant and Director of Old Mutual Actuaries & Consultants (OMAC) </li></ul><ul><li>A former Trustee of Old Mutual Staff Medical Aid Fund, Caremed and Galaxy Retirement Funds, serving Trustee of SARAF </li></ul>
    18. 18. Tied Trustees (cont.) <ul><li>Bertie van Wyk (Incoming Chairman) </li></ul><ul><li>After obtaining M.Comm in 1978, worked at Old Mutual Investments Division (now OMAM) </li></ul><ul><li>In 1989 transferred to Employee Benefits, rising to position of Senior Regional Manager </li></ul><ul><li>Built up Old Mutual’s business in the USA from 1995 to 1997 </li></ul><ul><li>Held various senior positions in Old Mutual Employee Benefits, including Chief Executive of Employee Benefits from 2003 to 2005 </li></ul><ul><li>In 2005 assumed role of Executive General Manager: Corporate Market until his retirement in 2006 </li></ul>
    19. 19. REPORT BACK FROM SUB-COMMITTEES <ul><li>Administration and audit sub-committee </li></ul><ul><li>Death and ill-health retirement benefits sub-committee </li></ul><ul><li>Communication sub-committee </li></ul><ul><li>Governance sub-committee </li></ul><ul><li>Investment sub-committee </li></ul><ul><li>Legal sub-committee </li></ul>
    20. 20. Administration and audit sub-committee <ul><li>Purpose </li></ul><ul><li>Overseeing Administrator, financial reporting, audit & actuarial </li></ul><ul><li>Milestones </li></ul><ul><li>Performance review of Administrator </li></ul><ul><li>Financial statements in accordance with GAAP submitted, exceeding industry norms </li></ul><ul><li>98% of benefits paid within 2 days of receipt of documentation </li></ul><ul><li>Focal areas </li></ul><ul><li>Provision of housing-loan sureties </li></ul><ul><li>Reduction of unallocated deposits </li></ul><ul><li>Establishment of unclaimed benefits account </li></ul><ul><li>Statutory actuarial valuation </li></ul><ul><li>Improvement in process for deduction of RFT and investment management fees </li></ul><ul><li>Process for transfer of assets between funds </li></ul>
    21. 21. Death & ill-health retirement benefits sub-committee <ul><li>Purpose </li></ul><ul><li>To make recommendations to Board on apportionment of death benefits and payment of ill-health retirement benefits </li></ul><ul><li>Focal areas </li></ul><ul><li>No ill-health benefit claims, 24 death benefit claims processed </li></ul><ul><li>Further refined claims process </li></ul><ul><li>Recommended umbrella trust fund arrangement </li></ul><ul><li>Conditions for payment to custodians/guardians </li></ul><ul><li>Master Rules to allow use of professional services to trace dependants; costs to be deducted from benefits </li></ul>
    22. 22. Communication sub-committee <ul><li>Purpose </li></ul><ul><li>To ensure fiduciary duties with regard to member communication are met </li></ul><ul><li>Milestones </li></ul><ul><li>Fund’s website upgraded, more accessible: </li></ul><ul><li>Benefit statements with regular newsletters sent to members </li></ul><ul><li>New member guide published </li></ul><ul><li>Member education sessions, production of DVD in final stages </li></ul><ul><li>Strategic Challenges </li></ul><ul><li>Member addresses </li></ul><ul><li>Member committees </li></ul><ul><li>Disclosure of investment manager information in fund fact sheets </li></ul><ul><li>Educating members to make informed investment choices </li></ul>
    23. 23. Governance sub-committee <ul><li>Purpose </li></ul><ul><li>To monitor the management of the Funds to ensure that governance objectives are met </li></ul><ul><li>Milestones </li></ul><ul><li>Publication by FSB of draft governance guidelines for SA funds based on policies and procedures developed by sub-committee and adopted by Evergreen Management Board </li></ul><ul><li>Focal areas </li></ul><ul><li>Reviewed and refined trustee code of conduct, trustee declaration of interests, fiduciary insurance, procedures for fees and expenses and risk-management strategy </li></ul><ul><li>Secret profits – declaration by Old Mutual </li></ul><ul><li>Disclosures – fees earned by independent Trustees </li></ul><ul><li>Board’s self-appraisal process </li></ul>
    24. 24. <ul><li>Purpose </li></ul><ul><li>To make recommendations to Board on appropriate selection of investment options within policy and to monitor performance of those options </li></ul><ul><li>Focal areas </li></ul><ul><li>Request by Symmetry to shorten period of reduced volatility prior to retirement </li></ul><ul><li>Opportunity for members to switch out of the CoreGrowth portfolio more than twice a year, at lower of guaranteed value and market value </li></ul><ul><li>Education on relationship between risk and return to minimise inappropriate selection of Low Choice Option </li></ul><ul><li>Full review of investment portfolios to take place in second half of 2007, with view to change default options if appropriate </li></ul>Investment sub-committee
    25. 25. <ul><li>Purpose </li></ul><ul><li>Monitors legal risks and compliance with legislation, reviews all contracts </li></ul><ul><li>Focal areas </li></ul><ul><li>Approved amendments to Master Rules, special rules, administration agreement between the Funds and Administrator and reviewed and monitored process flow involving registration of above </li></ul><ul><li>Revised the sub-committee’s mandate </li></ul><ul><li>Established process for managing complaints against the Fund, managed two complaints </li></ul><ul><li>Reviewed risk policies requested by participating employers and proposed standard risk policies from different insurers. </li></ul><ul><li>Prepared Power of Attorney for use by members in favour of investment advisors </li></ul><ul><li>Provided extensive input on provision of housing-loan surety arrangement </li></ul><ul><li>Set in motion first partial liquidation related to members of participating employer that did not remit fund contributions </li></ul>Legal sub-committee
    26. 26. FINANCIAL STATEMENTS <ul><li>EVERGREEN PENSION FUND </li></ul><ul><li>Statement of funds and net assets at 31 December 2006 </li></ul><ul><li>Revenue account for the year ended 31 December 2006 </li></ul><ul><li>EVERGREEN PROVIDENT FUND </li></ul><ul><li>Statement of funds and net assets at 31 December 2006 </li></ul><ul><li>Revenue account for the year ended 31 December 2006 </li></ul>
    27. 27. Statement of funds and net assets: 31-12-2006 EVERGREEN PENSION FUND Total funds 2006 2005 Net assets 2006 2005
    28. 28. Revenue account for the year ended 31-12-2006 EVERGREEN PENSION FUND 2006 2005
    29. 29. Statement of funds and net assets: 31-12-2006 EVERGREEN PROVIDENT FUND Total funds 2006 2005 Net assets 2006 2005
    30. 30. EVERGREEN PROVIDENT FUND Revenue account for the year ended 31-12-2006 2006 2005
    31. 31. <ul><li>THANK YOU </li></ul>