By Reneilwe Mthelebofu – Communications and Language Services (FSCA)
‘Governance is the cornerstone of the preservation of retirement fund assets’. These are the resounding words uttered as the Financial Sector Conduct Authority (FSCA) hosted the launch of the first eleven modules of the newly revamped Trustee Training Toolkit (TTK) e-learning platform. Attendees were given a glimpse of the new developments as well as all other relevant information in empowering them to complete the new toolkit. The new toolkit is aimed at ensuring that trustees are up-skilled with more comprehensive information for purposes of enhancing their knowledge and skills to better equip them in the exercise of their fiduciary duties in the retirement funds on which they serve.
According to the Organisation for Economic Co-operation and Development (OECD), the stronger the governance of a fund, the better the risks (such as operational risk, investment risk) will be managed and controlled, as a lot of supervisory efforts by regulators are dictated by their assessment of a pension fund’s risk profile. This makes equipping trustees with the relevant knowledge particularly imperative for the FSCA and highlights the importance of a comprehensive e-learning platform such as the TTK.
“The revision of the TTK was substantive in nature and shows that governance principles are not static in nature and have to keep pace with changes in our environment, economy and society. Trustees as directors of the boards of retirement funds need to be constantly alive to changes in their environment, to make sure that they provide the correct stewardship to the long-term savings of workers. Given that retirement funds account for about R5.6 trillion in assets under management, we recognise their significance for the asset owners but also for the importance of the economy,’’ says Astrid Ludin, Deputy Commissioner of the FSCA.
The importance of trustee training and trustees having appropriate levels of skills are recognised and codified in S7A(3) of the Pension Funds Act (PFA) which provides that "board members elected/appointed to a fund must attain such levels of skills and training as may be prescribed by the FSCA, within six months from the date of their appointment. Board members are, in turn, required to retain the prescribed levels of skills and training throughout their term of appointment."
Consistent with international best practice and legislation in other jurisdictions, the fit and proper requirements for board members, in the form of skills and competence are provided for in the PFA. Through the TTK, the FSCA aims to facilitate the training of trustees to get up to speed quicker, to acquire the necessary knowledge and skills and to be assisted with maintaining the required levels of competence in a rapidly changing environment.
Zareena Camroodien, Departmental Head of Fund Governance and Trustee Conduct at the FSCA explained that the FSCA has made a careful selection of relevant modules tailored to facilitate the training process through e-learning. “The formative and summative assessments at the end of each module will help board members to assess their own progress. The TTK places a strong emphasis on fund governance, which is designed to equip the board of trustees to discharge their duties adequately,” she says.
It is envisaged that after completing the TTK, trustees should to be in a better position to assess and evaluate the quality of advice received as opposed to just adhering to advice received. To this end, the TTK includes modules such as Governance, Contributions, Investments, Types of Benefits, Minimum Benefits, Protection of Benefits, Rules, Death Benefits, Effect of Divorce and Maintenance Orders, etc.
“South Africa has a well-developed retirement funds industry and a robust regulatory framework; however, we still see challenges in our environment. It’s for this reason the FSCA has identified trustee education and training as one of the FSCA’s key areas requiring attention. The FSCA sees this as part of its broader programme to promote compliance. Governance is the cornerstone of the preservation of retirement fund assets,” says Ludin.
The launch also received support from Institute of Retirement Funds Africa (IRFA), Batseta and Congress of South African Trade Unions (Cosatu).
The FSCA will monitor and enforce the completion of the new TTK in the following ways:
- Through reports generated by the TTK platform.
- The Governance Return incorporated in the Omni CBR will also be used as a tool to monitor compliance.
- The utilisation of on-site inspections to monitor compliance.
- Taking regulatory action where there is lack of compliance.
- In terms of S26(2) of the PFA, compliance with S7A and by necessary implication the TTK, is the responsibility of the entire board, failing which the FSCA may take appropriate regulatory action.
- In terms of S167 of the Financial Sector Regulation Act 9 of 2017 (FSR Act), the FSCA may impose an administrative penalty for failure to complete the TTK.
The toolkit has been made live and trustees have six months from 26 September 2023 to complete the first eleven modules and can register and access the new toolkit using the link below:
FSCA Trustee Training Toolkit | 
