Communication with retirement fund members is not merely sending the glossy brochures once a year but a two-way process which reflects understanding.
This was one the fundamental issues the adjudicators of the Institute of Retirement Funds took into account when selecting the winners of the Personal Finance/Liberty Life communication annual awards.
Personal Finance editor Bruce Cameron and Liberty Life deputy chairman Dorian Wharton-Hood emphasised at the awards ceremony at the annual Institute of Retirement Funds meeting that communication with retirement fund members had to be improved to enable proper decisions to be made.
The adjudicators said their main objective was to recognise funds which had demonstrated the ability to communicate simply with their members in a effective low-cost manner.
The funds did not need a mass of colourful material to achieve this. "The prime requirement is a report reflecting how communication took place."
Last year adjudicators emphasised that communication was a two-way process. As a result, this year particular weight was given to how the effectiveness of communication was measured. Additional credit was given where there was evidence of a long-term on-going co-ordinated communication plan.
The adjudicators highlighted areas where they felt funds should improve communication with the members:
* A number of entries concentrated on the issue of investment risk in defined contribution funds but they failed to deal with the wider issues of communicating the benefits of retirement funds in general;
* Few entries dealt with the inclusion of elected or member trustees in the boards of trustees by the end of 1988;
* The language used by many of the funds continued to be too complex requiring a literacy level "way beyond the capacity of the average fund member". One phrase in particular which irked the adjudicators was the "actuarial value" of a fund member. (An actuarial value is the share a member has of a defined benefit fund at a particular date. It includes member's and employer's contributions);
* Pensioners are a very important segment of fund members "who seem to be forgotten" in dealing with the conversion of funds from defined benefit to defined contribution. Pensioners are "often the most vulnerable as they cannot leave and go elsewhere if they are not in favour of change".
The winners were:
* Small fund category: No entries.
* Medium fund category: Dorbyl Pension fund, which continued to demonstrate an on-going communications commitment. The adjudicators particularly liked the personal nature of the interaction between the fund and its members.
* Large fund category merit award: This special award was made to the Debswana Pension Fund which "is a model of well-researched and well-targeted communication".
* Large fund category: The Mineworkers Provident Fund, which was also the overall winner. With no employer to finance an extensive communications programme the adjudicators felt "that their trustees' simple, yet effective method of imparting information to members aligns very closely with the judging criteria".
"They managed to combine dissemination of information with education in the most imaginative and positive way. They also encouraged a sense of belonging and pride amongst the fund membership, which is unusual for a multi-employer fund."
* Special award certificate: Three times overall winner Eskom Pension fund, which "arguably has the most comprehensive and effective communications programme in the country." Eskom, however, did not win the overall award because of the adjudicators' emphasis on low costs.