Colourfield optimistic about National Treasury retirement reforms

Colourfield applauds National Treasury for commitment to improve retirement industry in South Africa.

by Shaun Levitan
Published July 31, 2015
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National Treasury has released an update to South Africa’s retirement reform policies, with the proposal aiming to improve retirement conditions for all South Africans through the prescription of certain new requirements.

Colourfield CEO, Costa Economou comments, “We applaud the National Treasury for its commitment to improving the retirement industry in South Africa. The proposal released today lays out certain suggestions which, if implemented, will act in the best interests of policyholders by ensuring that pension funds have default investment portfolios for the investment of retirement savings, as well as default strategies for retiring members and default preservation rules for members.

“This is critical as it will offer further protection and retirement stability, both prior to and during retirement. Driving lower policy charges and simplifying products has also been an important development in the draft regulation.”

He further notes that the regulations suggest that if a fund does not provide a guarantee of the level of pension income, it must also have an asset mix that pays due regard to the nature and term of the class of pension liabilities of the fund.

Economou adds, “We are also very supportive of the suggestions to increase the visibility of passive investments of listed assets in South Africa. The draft regulation will require that trustees consider passive or enhanced passive investments as part of or all of their default investment portfolios. This will essentially help alleviate complex policy, high product and policy charges, as well as complex policy conditions and exit penalties.”

The suggested regulation changes by National Treasury is a game changer for South Africa and its retirement structure. This is what the industry has been waiting for and it’s a very positive step forward in developing a more robust retirement offering in South Africa,” concludes Economou.

Colourfield

Colourfield is an investment business that takes a scientific and academic approach to investing, using cutting-edge technology and the world’s foremost analytical models and theory to help increase the certainty of accurately determining and achieving the specific financial goals of both institutions and individuals.

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