Retirement fund governance in South Africa.
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Date
2004
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Abstract
The retirement fund industry has seen a number of scandals both locally and internationally recently. These have left the trustees, the custodians of the large sums of monies in retirement funds, exposed to lawsuits. This is so because the fund members and retirees blame these trustees for negligence and lack of foresight in putting in place prudential standards by which their monies should be managed. These prudential standards are encompassed in corporate governance, as we will appreciate. Retirement fund governance is a subset of corporate governance; it is the mirror image of the corporate governance of a company, which consists of a set of relationships between company's management, board, shareholders and other stakeholders. The same principles that apply to business assets in general also apply to the management of pension assets. This study set out to ascertain whether or not retirement funds in South Africa do comply with the governance guidelines as set by the Financial Services Board (FSB). I selected a sample of 300 fund trustees but excluded the principal officers and tried to select an equal number from employee elected and employer appointed, a balance that proved to be extremely difficult to strike. The sample was randomly drawn using my colleagues for referrals as well as just calling a company asking for a principal officer who would refer me to the trustees. (I received a great deal of cooperation from the principal officers to this end). The participants represent a wide spectrum of industry sectors. They represent manufacturing, auto and motor industry, local government and a few from the financial services industry. I used a 23-question questionnaire conducting interviews both telephonically and face-to-face interactions as well mail. I managed to receive 87 responses from face-to-face interactions locally (Port Elizabeth), 67 responses from the mail and 60 from telephone interviews. I used a software program called statistica 6.1 to analyze my data and produce the frequency tables and graphs.
Description
Thesis (MBA)-University of Natal, Durban, 2004.
Keywords
Retirement funds--Industry., Social responsibility., Theses--Business administration.