What’s the compliance levels of the participating employers with monthly contributions and how you encourage compliance adherence?

Compliance is high. The pension’s regulator is responsible for ensuring compliance and we report employers who are systematically paying late to the regulator.

What was the motive behind a Sharia fund and what are its features?

Demand from the sharia fund came from employers primarily, as they didn't want to be seen to be discriminating against a minority of their workforce. It is an all equity fund tracking the Dow Jones Islamic Titans index which is a global index that excludes alcohol manufacturers, financials, over leveraged companies etc.

Why did you start the default contribution rate so low?

The government sets the contribution rates - the aim however was to minimize opt out by taking a small amount at first and then gradually increasing (a sort of save more tomorrow approach)

What happens to your target date members when they reach retirement? Do they go out of fund or can they get income in fund?

All participants of our target date funds can move out of the funds at any time. The funds do not create income streams, but rather keep the assets invested in a portfolio suitable for someone who is in retirement, including global stocks and bonds.

How do you decide which markets are efficient and which aren’t when deciding between passive and active investment strategies?

We don’t look at the question of active versus passive management as an “either/or” proposition, but rather consider how both strategies may be used to provide the greatest advantage. In general, we use passive or enhanced index strategies in efficiently priced capital market segments where the probability of success and rewards from pursuing active management are low; and we use active management strategies in less efficient asset classes where market inefficiencies and legitimate out-of-benchmark opportunities allow active managers to generate excess returns.

Governance in an umbrella fund space - what’s to come

On a positive note, the scaling up and size of an umbrella fund, should allow for increased governance resourcing i.e., a strong board with the necessary mix of skills, expertise and level of independence required to ensure adequate oversight. I suggest that the challenges, to a large extent, will be:

• the oversight of outsourced investment and administrative activities for the funds
• the proactive role needed to be played by board members, particularly in the area of conflict of interests by the service providers and where various funds are pooled, the board will need to ensure that the interests of the retirement fund are treated fairly amidst the potential co-competing interests of other investment vehicles and parallel funds managed by the same investment manager.

It is suggested that, inter alia, independent board members and a suitable conflicts of interests policy could assist to meet the challenges in these areas

How do we make sure we get the tangible governance outcomes vs. killing an organisation with too many controls?

Good corporate governance is not about excessive controls, i.e. too much conformance at the expense of the performance of an organisation. King IV has been developed to promote good corporate governance as integral to running an organisation and delivering governance outcomes such as an ethical culture, good performance, effective control and legitimacy on the basis of high-level principles applicable to all types of organisations across a variety of sectors. King IV will further reinforce good corporate governance as a holistic and interrelated set of arrangements to be understood and implemented in an integrated manner on a qualitative rather than a quantitative basis, with a high degree of transparency, thus ensuring substance over form.

Similar to audit firm rotations, how often do u believe board members of listed cos, particularly chairperson, should "rotate"?

The board should put in place a programme for periodic, staggered rotation of its members to invigorate its capabilities by introducing members with new expertise and perspectives, while retaining valuable institutional knowledge, skills and experience and maintaining continuity. Typically, in terms of current practices, three terms of three years, i.e. nine years has been considered an appropriate period where a director should be rigorously reviewed from both an independence as well as a performance aspect. In respect of the Chairman, King III advocated an annual election of the Chairman. However this should be assessed in line with the needs of the organisation and could be for a period of, say, three years to ensure the necessary continuity. Such period should be stipulated in the MOI and or Board Charter.