Retirement Funds

Overview

The retirement funds industry continues to be impacted by regulatory changes – these not only include enhanced financial reporting requirements and actuarial guidelines but also an increased focus on governance, risk management and compliance requirements.

We have a dedicated retirement funds industry group with extensive experience in providing services to both retirement funds and administrators. We have a considerable skills base, both in South Africa and globally, and have an in depth knowledge of the functions and operations within the Industry.

 

Man working in the retirement funds industry department at PwC.

How we can add value

Sustainability issue

Sustainability (i.e. Environmental, Social and Governance, ESG) risks have remained at the top of identified global risks presented by the World Economic Forum (WEF) for a number of years. The level of interest in value added (or taken away) and social impact will continue to increase. Building trust through better communications may be one approach to tackle this – although it has to be remembered, “you are what you do, not what you say you do”.  

In the South African context, sustainability of investments and assets in the context of a retirement fund's investment policy is a key topic, as evidenced by recent communication and guidance from the FSCA.  Demonstrating the ability and appetite to focus on sustainable investment opportunities is critical to the future success of retirement funds and their credibility in the eyes of multiple stakeholders.

Refer Sustainability page for our range of services.

 

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External audit

We have the largest market-share in auditing large Private, Umbrella, Retirement Annuity and Preservation Funds in the retirement fund industry in South Africa.

Through performing these audits we have established a considerable skills base, with deep experience in the functioning and operations of retirement funds. We are therefore familiar with all local regulatory requirements and are fully attuned to the risks and challenges faced by the retirement funds industry and administrators. 

We have a locally based actuarial support practice that is available to you and our engagement team, should this service be required in aspects of our audits.

We are committed to delivering our PwC Experience to the retirement fund industry, and are grateful to our clients for recognising our dedication and expertise.

 

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Internal audit

Risk, governance and internal control have never been higher on the boardroom agenda as the board faces growing pressure from stakeholders. The internal audit function should play a critical role in the corporate governance framework by providing independent assurance that protects the business against risk, informs strategic decision-making and improves overall performance. 

PwC's pension fund internal audit specialists help the board of funds, benefit from an enhanced internal audit function that provides better value for money and increased assurance.

 

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Actuarial

Retirement fund strategy and consulting

An effective retirement fund strategy balances the commitments, responsibilities and expectations of various stakeholders. Stakeholders include the Board, fund members, fund sponsor and regulator.

PwC can help you establish the path to effectively achieve the desired outcomes for your fund while mitigating potential risks. We’ve helped many retirement funds develop and execute their strategic vision by combining our financial analysis and modelling skills with our industry knowledge and understanding of the regulatory framework.

Financial reporting in respect of retirement funds (IAS 19)

We perform IAS 19 valuations for a large portfolio of clients in South Africa, Africa and globally. The scope of these valuations include assisting the client with setting appropriate valuation assumptions, determining the liability and all the components of the liability build-up, calculating the projected income statement and cash flow items for the subsequent financial year and specifying the disclosure items that should be included in the annual financial statements.  We can further assist clients manage the risks associated with their employee benefit plans from a financial point of view.

Retirement fund valuation services

Our team includes two FSCA approved retirement fund valuators. This allows us to fulfil the role of independent valuator to your retirement fund. The responsibilities of the valuator include completion and submission of statutory retirement fund reporting, benefit calculations, certification of financial soundness of rule amendments that may affect the financial condition of the fund, approval of membership transfers and provision of advice on the distribution of surplus where necessary.

We have also supported other valuators by providing independent valuation services. Due to our team’s vast experience in completing statutory actuarial valuations and reports, and our actuaries' standing within the industry, retirement fund valuators trust us to provide a high quality service.

Audit experts

We act as experts on behalf of the audit team by reviewing the financial reporting in respect of retirement funds (IAS 19) and statutory retirement fund reporting. Our review includes an assessment of the assumptions and methodology used and an assessment of the reasonability of the reported liability and associated income statement and cash flow items. Our findings are reported to the audit team and discussed with the audit client where necessary.  

 

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ISAE 3402

ISAE 3402 - strong industry credentials 

Our ISAE 3402 Service Centre of Excellence is highly regarded in the financial services industry for performing these assignments both locally and globally, meeting the needs of various stakeholders and achieving synergies in the process. 

As part of our ISAE 3402 service:

  • we make sure the “right” controls are identified. We hold  “workshop-styled” meetings prior to the commencement of the engagement to ensure that the objective of identifying the right controls to focus on is achieved to avoid unnecessary testing.
  • technology-enabled. We use our innovative technologies on the audit to enhance coverage and achieve efficiencies which results in a more efficient engagement. 
  • we understand the needs of the users. At the conclusion of the engagement, we hold a meeting with the key stakeholders placing reliance on the ISAE 3402 reports to respond to any questions they may have.

 

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Julanie Basson

Julanie Basson

Partner, PwC South Africa

Tel: +27 (0) 11 797 5391

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