Invest smarter for a longer lifespan

By: STAFF REPORTER

ADVANCES in medical science mean that people will live far longer, so pension investors need to adopt different strategies and consider retiring later to ensure that their pension funds can last for the duration of their lives.

This was the message given by Sara Herbert of Jacques Malan Consultants & Actuaries at the annual members meeting of the Benchmark Retirement Fund in Windhoek this week. Her sentiment was echoed by Jeremy Gardiner, director of Investec Asset Managers, at the same meeting.
Herbert, who advises the Benchmark Retirement Fund on investments, went on to counsel pension investors to carefully consider their investment strategies and seek sound advice, citing the common practice of adopting overly conservative investment strategies when approaching retirement age. She explained how a conservative investment strategy could reduce the capital value of a pension investment, and the period during which the amount could be useful to the pensioner.
Given the emotional nature of personal investments, and the potential losses, Herbert said it is important for investors to seek impartial advice.
Talking about the retirement fund’s annual results, Robert Grant of KPMG stated that Benchmark grew by approximately N$190 million during 2011 financial year. This bears testimony to a high level of trust Namibian pension investors place in the Fund, according to principal officer of the fund, Günter Pfeifer.
He went on to point out that the fund membership approached 6 000 during the period and stated that the fund expected to administer assets in excess of N$1 billion in the very near future.
Asked about how he expected local pension funds to perform in the face of tough financial conditions across the world, Pfeifer said: “It is not possible to predict how pension investments will perform and pension investments are not immune to these tough conditions. A carefully selected investment strategy needs to be followed to minimise any negative impact.”
“While the investment portfolios utilised by the members and member organisations are determined in conjunction with their investment advisors and employee benefit consultants, the fund has made a suitable range of investment portfolios available for the members to choose from. People also need to remember that an investment into a pension fund requires a long-term horizon.
“Although investment returns may be volatile and negative at times, the typical market-linked, balanced investment portfolio should deliver growth in excess of inflation over periods longer than five years. And proper administration of member investments ensures that unnecessary leakage is avoided,” Pfeifer said.
Asked about the trend to choose Namibian administrators, Pfeifer said: “Increasingly, individuals and organisations are recognising that Namibia has its own legislative requirements. This requires local expertise to ensure adherence with those regulatory requirements. Members and member companies should also benefit from local accountability and transparency.”
“Benchmark excels with detailed, regular and transparent reporting and provision of information to its members. The fund has consistently provided communication above and beyond the regulatory requirement, which includes the annual member meeting, voluntary annual actuarial valuations and financial reports.
“The fund’s growth can, to a large extent, be attributed to the market appreciating this approach. The expected amendments to legislation affecting retirement funds will have a major impact on our members, so we have been reporting to our members on this, as well as engaging the industry and policy makers,” he said.
“We expect the industry to continue maturing, and as a result of this, more and more Namibians will switch to highly focused, expert administrators,” Pfeifer said.

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