The next 12 months are likely to see dramatic changes in the way retirement funds operate and many pension fund trustees are currently blissfully unaware of their responsibilities.
However, it is unlikely that the Katz Committee recommendations, which could significantly alter the taxation of your retirement funds, will be implemented in 1998, says Graeme Kerrigan, joint managing director of employee benefit consultants Alexander Forbes.
"At this stage it seems that government is in no rush to change the structure of retirement taxation law now that retirement fund income is taxable in the hands of a fund and is generating revenue for the fiscus. It is possible, however, that the tax burden on retirement funds could increase in 1998."
The other legislative issue that is influencing the structure of the retirement funds market is the current and pending legislation on ownership and access to retirement fund surpluses.
Kerrigan says the recent judgment in the High Court in the Tek vs Defy case has put in doubt the ability for a company to continue with "a contribution holiday from surpluses in a retirement fund".
He says amendments to pension fund legislation will make fund trustees increasingly accountable to members and could be liable in their personal capacities for the consequences of their decisions.
"Legislation for the joint management of retirement funds will mean that all funds will have to be jointly managed by member-elected trustees by no later than December 15, 1998. That's in about 12 months' time and many of these trustees have little or no experience of managing a retirement programme.
"They will require extensive training to prepare them for their new role and if a fund is paying pensions, pensioners must also be included in the election process.
"They, too, will need to acquire new skills and knowledge to fulfill their roles adequately."
Other issues affecting the industry which are not necessarily being driven by legislation are the continued move of funds from defined benefit to defined contribution, the trend for defined contribution funds to offer a choice of investment portfolios and the move by funds to outsource their pension liabilities to external assurance company annuities.
Alexander Forbes' experience is that the move to offer investment choice in defined contribution funds is starting to gather pace.
"However, there are some problems in relation to communicating choice to members, particularly where members have little investment background. It is likely that investment choice will become more commonplace during the next two to three years."
There is also an increasing move to use external assurance companies to administer pensions.
Kerrigan says an assurance company, with a much bigger pensioner and asset base, is able to follow a more appropriate investment strategy and still have sufficient cash flow to meet regular pension payments.
By moving to an external annuity, a pensioner's increase is only based on the investment performance of the underlying assets, not on any subjective assessment of the pensioner's need for an increase."