South African retirement fund members are overwhelmed by countless options – from choosing an investment portfolio during their working years, to when they change jobs and need to preserve their retirement savings, and at the time of retirement when they need to choose an annuity that will sustain them for the rest of their retired life.
This is the belief of Katherine Barker, Head of FundsAtWork at Momentum Corporate, who welcomes the implementation of the new retirement fund default regulations set for 1 March 2019, when retirement funds will be required to ensure that members receive benefit counselling to provide information and assist them in making appropriate decisions to enhance their retirement outcomes.
“Our research shows that many members of the retirement funds we administer do not have a personal financial adviser and, as such, their only access to financial advice is through their scheme’s financial adviser. The retirement benefits counselling service will be of tremendous value to these members,” says Barker, who formed part of a panel of experts at the Masterclass held by Asset TV to discuss the new regulations affecting default annuity strategies and Retirement benefit counselling.
Retirement benefit counselling can be instrumental in delivering better outcomes, says Barker, who believes this is certainly a step in the right direction. “One of the ways it will improve outcomes is by empowering members with relevant information at key decision-points, such as resignation or retirement.
“However, to be able to make informed decisions at these critical stages of a member’s life, they also need access to simple and easy-to-understand information on their benefits. This is exactly what benefit counselling will aim to achieve. By providing an opportunity for funds to engage with members not only on fund benefits, but also to lift the overall level of financial education of members, this counselling can cover a variety of topics relating to finances,” continues Barker.