The KwaZulu-Natal Joint Municipal Pension/Provident Funds (NJMPF) drives inclusive, transparent and sustainable practices through innovation and financial literacy.
Lawmakers globally and international regulatory institutions exert stringent authority over financial institutions, particularly retirement funds because of the funds they hold. Whether these laws reduce or add value for stakeholders, the general perception is that as laws change and become more stringent, costs also escalate, and room for innovation and creativity is in some instances reduced. One organisation is leading the pack and offers a global example of what is meant by superior service. The NJMPF is recognised internationally for excellence in governance, investments, treating customers fairly, financial literacy programmes and best practices in retirement funding services.
The NJMPF is a not for profit organisation, which provides retirement funding benefits for municipal employees in KwaZulu-Natal. These employees are employed at 55 municipalities in the Province. The NJMPF's vision is to provide superior retirement services and benefits to the 20 000 active members and 10 000 pensioners and beneficiaries making up its membership.
There are several surveys published in South Africa and worldwide on the state of the population's attitudes and readiness for retirement. The results have tended to be consistent. For example, a survey conducted of South African households was performed many years ago on a representative sample of 65-year olds. The following facts were uncovered; 47% were dependent on relatives, 31% were forced to continue working, 16% were dependent on a state pension, and 6% were financially independent. In recent studies, this situation has not significantly shifted - perhaps due to inflation rates, taxation and cost of living increasing - Source: The South African Financial Planning Handbook 2019.
Coupled with the above challenge is the issue of low financial literacy levels. According to a study by the Organisation for Economic Co-operation and Development (OECD), South Africa nears the bottom of the financial literacy class. The OECD/INFE International Survey of Adult Financial Literacy Competencies questioned 50 000 people aged between 18 and 79 and found that, on average, only 56% of adults across the 30 participating countries achieved a score of at least five out of seven, the minimum target score. South Africa barely reached the 30% score.
In a retirement funding perspective, retirement funds should advance the core business objective, while simultaneously developing systems to enhance members and communities through creativity and collaboration without incurring excessive costs. This view that drives plans and projects is motivated by team work, passion, strategic oversight, clear and proper communication and education, placing members at the core of decision making.
The competitive edge for the NJMPF is providing superior service to stakeholders at low fees and ensuring high investment returns which increases members retirement benefits.
Using technology to lower fees is critical for a retirement funding service and its members. Experts believe that as entities have grown and complexity, specialisation, silos, and ultimately hierarchy have choked off the capacity to readily adapt and innovate. Finding innovative ways to enhance and accelerate member participation in the retirement funding arrangement is important.
The NJMPF is introducing a barcoded ballot voting system for election of the Board of Trustees. The NJMPF is among a few if not the only South African retirement fund to provide a barcoded voting system in-house for the election of Trustees.
Some of the most recent innovations introduced by the NJMPF is an interactive webpage to promote information sharing and a mobile application was created to promote education and communication.
In recent years, the NJMPF teamed up with the National Credit Regulator (NCR) as it has recognised that within its own membership, members are burdened with debt. In collaborating with the NCR, the NJMPF has been able to offer its members and pensioners advice on debt and credit management from the experts (NCR) themselves. Partnering with the regulator allows for leveraging of expertise on credit/debt management education and educating NJMPF members at no cost. During the past years the NJMPF has partnered with the Financial Sector Conduct Authority and the Office of the Pension Funds Adjudicator and a law firm to educate stakeholders about issues relating to financial literacy.
What is your deal when it comes to retirement?
The Fund continues the momentum of exploring and finding modern ways of communicating with stakeholders. Through these initiated communication campaigns, the NJMPF aims to provide solutions to empower its membership through member education. The NJMPF utilises numerous ways of communicating with its stakeholders to ensure that the Funds' mission of providing superior retirement services is achieved. With the change in legislation - increasing penetration of online mediums of communicating, the NJMPF is focusing on increasing the speed of communicating and educating stakeholders whilst also reducing the costs associated with this education and communication. The NJMPF is also moving towards a more fun and playful manner of engaging stakeholders. Getting the whole family involved in financial issues will assist in a more financially free community. A common way of getting the family together is through a good game of cards. The NJMPF has initiated the 'playing cards' project - this initiative is to keep stakeholders engaged in a fun and interactive manner. Playing cards can be a pastime that offers pleasure and social enjoyment. A game of cards is a way of entertaining yourself in a group and it is one of the most popular indoor activities adults and children play. The NJMPF 'playing cards' form part and parcel of the Funds' financial literacy programme.
Globally financial literacy levels are low and many lack the ability to understand essential financial concepts in making informed decisions about saving, investing and borrowing. This is especially true for South Africa and a large population of the NJMPF's membership.
The campaign is entitled "What is your deal when it comes to retirement?". Boring educational material on money, credit, and investments can actually discourage people of all ages from learning valuable information that can help them make wise financial decisions. Fortunately, money management lessons masquerading as games can make learning about finance easy and even fun. The NJMPF understands that the subject of retirement is tedious to some and many people only start thinking about it when it's too late.
The playing cards have had a huge reputational impact, significantly raising awareness on debt management and encouraging a saving culture. The NJMPF's financial literacy commitment is to help members move towards a financially free future.
Enhanced Benefits to Stakeholders
Investment performance is a key agenda for any retirement fund. The NJMPF has achieved excellent short and long-term investment performance which has enabled the Funds to increase and improve benefits to members and pensioners. Pensioners of the NJMPF are awarded increases and benefits which greatly improve their standard of living.
ETHICAL GOVERNANCE CULTURE
The NJMPF has continued the tradition of obtaining clean audits from the Auditor General of its annual financial statements in an environment where clean audits are rare. This is an indication of the good corporate governance practices. The NJMPF is complying with all principles applicable in the retirement industry.
Full Name of Company: Natal Joint Municipal Pension/KwaZulu-Natal Joint Municipal Provident Funds (NJMPF)
Industry Sector: Financial Services - Retirement Funding Industry
Services / Products: Retirement Products - Superannuation Fund, Retirement Fund and Provident Fund
Date Established: 1942
Customer Base: 20 000 Active Members and 10 000
Active Pensioners = 30 000 Total Membership
No. of Employees: 39
B-BBEE Status: We are a retirement fund focused on transformation in the industry
Auditors / Accountants: Internal Auditors - Deloitte
External Auditors - Auditor General (AG)
Bankers: Standard Bank
CEO / Principal Officer: Bongi Mkhize
Chief Operating Officer: Cheryl Ward
Chief Financial Officer: Zinhle Ndlovu
Public Relations Manager: Lunga Mahlaba
Finance Manager: Ayanda Majola
Physical Address: 5 Derby Place, Derby Downs Office Park, University Road, Westville, 3630
Postal Address: P.O. Box 33, Westwood, 3633
Tel: +27 (0)31 279 5330
Fax: +27 (0)31 266 6715