Retirement funds need to use people skilled in communication to explain fully to members how their funds work and the consequences of any choices they make.
This is the view of David Rackley, who chairs a panel that judges the annual Liberty Life/Personal Finance awards for the retirement funds that do best in communicating with their members.
The awards for 1997 will be announced at a ceremony at the Institute of Retirement Funds' (IRF) annual conference in Johannesburg on Monday.
The awards play an essential role in encouraging retirement funds to put more effort into member communication.
Many retirement fund members have no idea about their funds, and often discover too late that what they receive is not what they expected.
In addition to Rackley, the other judges on the panel are: Daan Kruger, of the South African Association of Industrial Editors; Renier Botha of the Financial Services Board; Professor George Angelopulo, head of the Department of Communications at Unisa; Bob Woodgate of The Retirement Association; Sonja Verwey, head of the Communications Department at Rand Afrikaans University; and Estie van Coller, of the IRF's Communications Committee.
Rackley said although the standard of the entries was good, the committee felt that there was still a lot companies could do to enhance communication with fund members.
"Members need to know that they will not be able to live off their pension fund alone and that it will probably only cover the rent, water and lights," he said.
"With the move towards defined contribution funds, members must be educated about their choice of portfolio. They could also be told useful information such as the fact that a provident fund is cheaper than a pension fund.''