Retirement funds often do not communicate all the facts to members and some still write in a language that few members can understand, the judges in the Institute of Retirement Funds Communication Challenge have warned.
The Communication Challenge, sponsored by Liberty Life and Personal Finance, recognises funds, large and small, which make successful efforts to communicate with members.
This year's winners were: in the large funds category, Debswana Pension Fund, Eskom Pension and Provident Fund and De Beers Pension Fund; and in the small funds category, Dorbyl Provident Fund and Development Bank of SA Provident Fund.
Judges Giselle Gould, executive director of the IRF, Dube Tsidi, of the Financial Services Board, Sonja Verwey, of Rand Afrikaans University, Charmaine Scriven, of Unisa, and Bob Woodgate, of the Retirement Association, said the standard of entries was much higher than in previous years.
Emphasising the importance of communicating with members, the judges noted that too many funds which changed from a defined benefit to a defined contribution system did not communicate all the facts to members, especially to members close to retirement.
"All too often the sweetener that funds offer members to encourage them to convert to a defined contribution fund is communicated in such a way that it obscures the other important realities, such as investment risk taken by members," the judges said.
"Funds should strive to be as honest as possible when communicating the facts if they want members to make informed choices.
"Funds offering investment choices should also realise the magnitude of member education that needs to be done before members can be expected to choose the investment risk profile that suits their needs."
The judges expressed concern that some funds still wrote in a language which few members could understand.
"These funds need to realise the importance of explaining technical terms and jargon."
WHAT THE JUDGES SAID...
Debswana Pension Fund, winner in the large fund category:
Debswana's success in communication is based on formal research, a critical review of activities, the identification of objectives, meticulous planning and the involvement of all role players.
The communication strategy reflects and draws on members' cultural customs and values and takes into account the members' need for discussion offering one-on-one verbal communication, telephonic helplines, general meetings and pre-retirement workshops.
Eskom Pension and Provident Fund, runner up in the large fund category:
This fund was recognised for successfully meeting communication objectives through various professional communication programmes, aimed at educating its 65 000 members and pensioners.
De Beers Pension Fund, third place in the large funds category:
De Beers managed within a year to set up an effective two-way communication programme. This was one of the few funds to explain the practicalities of retirement through the newsletter "Fund Focus".
Dorbyl Provident Fund, winner in the small fund category:
This fund was rewarded for looking for ways to improve communication strategies; never losing sight of the human element, and listening to the needs of its 2 000 members and pensioners.
The fund has created a comprehensive member file which contains information on benefits and general financial information. Members receive a bi-monthly newsletter and can take part in financial planning seminars where they can meet financial advisers.
Development Bank of SA Provident Fund, runner-up in the small fund category:
This fund encouraged two-way communication with members. The communication material had high educational value and was personalised to suit the needs of members.