Trustees must reassure members
Trustees of retirement funds must communicate effectively with members to allow them to plan their finances.
So says Craig Aitchison, head of Old Mutual Actuaries & Consultants.
Given that contributions to retirement, pension and provident funds are a significant investment for many people, he says fund members, particularly those close to retirement, may be concerned as to the effect current economic conditions may have had on their hard-earned savings.
"Fund members are expected to pay far closer attention to retirement savings in 2009 and trustees will need to demonstrate that they are getting value for money," Aitchison says.
He says the 2008 Old Mutual Retirement Fund Survey reveals that many members don't know the important things - such as the level of life cover available to them.
This may result in members buying additional cover, which they do not need, he says.
Aitchison says: "Good member communication builds trust in a fund and this provides reassurance to members during times of economic uncertainty like we are experiencing now."
Aitchison says a key focus of the member communications in 2009 is how the fund will maximise value for money.
"Consumers who are tightening their belts, will have expectations that their fund trustees will be doing the same and that their hard-earned contributions are used effectively.
"The impending reform of the retirement fund industry, prompted in part by the level of costs in the industry, will simply add to the cost-consciousness of members," says Aitchison.