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Fairheads Times - November 2012
Welcome to the last issue of Fairheads Times for 2012. This issue contains stories about the annual guardian roadshow, the POPI bill and the IRF Conference. We also give some case studies to show how beneficiary funds are helping to sustain the lives of beneficiaries and enable them to get a good education. Enjoy the read!
 Guardian roadshows
In August Fairheads commenced the popular annual guardian roadshows which we have staged around the country in previous years.
We have learnt much during these interventions, particularly about how better to communicate with guardians and beneficiaries.
We have also been humbled by some of the challenges that we see families grappling with. In Lesotho, for example, many people need to navigate hazardous mountainous roads to get anywhere. Also there are simply no amenities or infrastructure to be able to send or receive a fax. We need to rely on the postal system to deliver important documentation such as certificates of existence. A lot of communication needs to be done by SMS.
We were also shocked to find that some of our beneficiaries were living in orphanages, with their guardians using the children’s funds for their own benefit. We are taking action in this regard.
Feedback from guardians at the roadshows centred around a few themes:
• guardians are concerned about the ability of 18 year olds to manage large sums of money on their own when their accounts terminate
• many guardians do not know that they can make special capital requests for medical and school expenses and the like
• times are exceedingly tough financially and families are battling to survive on their income payments
We are taking the feedback into account and working at the challenges.
By the end of October we will have held workshops in Gauteng, KwaZulu Natal (urban), Free State, Lesotho, Mpumalanga, North West and Eastern Cape. In November we will visit KZN (rural), Mozambique, Western Cape, Limpopo and Swaziland.
This is a huge logistical exercise and each year we review the process. It is debatable whether the workshops should be concentrated in one part of the year. We are evaluating not only how we are meeting the requirements of PF130 but going beyond them to reach out to members and guardians.
 
 Message from the CEO
We are always surprised by the pace of time as the year end is nearly upon us and pressure mounts to complete the many tasks that we have set ourselves. So far it has been a successful year of consolidating our client base and focusing on service delivery and I am proud to acknowledge that we are moving from strength to strength. Our annual guardian roadshows are well on the way and continue to prove a great success in communicating with guardians and member, particularlyå in remote areas. Nothing beats face to face communication and engagement.
As a market leader in service delivery, expectations are high and at our recent strategy workshop we have set a number of important goals to achieve over the next year, which should result in greater ethics and service levels. I would like to take this opportunity to thanks all our stakeholders for supporting us to ensure that we have a sustainable business with purpose and quality delivery of service. I wish you all well over the festive season!
Best wishes
RICHARD
 IRF conference report-back
Giselle Gould took part in a panel discussion workshop at the Institute of Retirement Funds (IRF) conference in Cape Town on 2 September. The theme of the conference was Journey to Sustainability and Giselle’s presentation focused on three areas in which beneficiary funds provide sustainability, as follows:
The real life impact of beneficiary funds on children’s lives was shown through a few case studies (please see later article). These included examples where funds were needed for medical operations, a beneficiary who was incarcerated, another who was very talented at a sport, and another who was in drug rehabilitation. In each case, the assets in the beneficiary fund were able to support the child in his or her particular needs.
Giselle put forward a challenge to beneficiary fund service providers to create their own bursary fund which would be used to provide bursaries to successful school learners. This would be a huge incentive for guardians and beneficiaries to use funds wisely for education and such bursary holders could become an inspiration for other kids. Fairheads is considering creating a bursary fund which would commence in 2013.
Age of majority. Fairheads has written on this issue before (click here to see article) and it is a question that guardians raise frequently: Are 18-year olds responsible enough to handle their own finances when their beneficiary fund terminates? The Financial Services Board is considering the matter and there may be an exception made for the retirement and beneficiary fund industry by raising the majority age from 18 back to 21 for the purpose of minors’ benefits. This would undoubtedly give a huge boost to the sustainability of funds for tertiary education.
The panel discussion at the IRF conference was lively and we look forward to participating again next year.
Beneficiary funds sustaining lives - Case studies
Following below are a few short case studies from our administration teams which show how beneficiary funds can be used to sustain beneficiaries through their education and life needs. In two of the three case studies, the beneficiary had decided to leave their assets in their beneficiary fund account when they turned 18.
Case study – medical expenses
Funds left in beneficiary fund on termination
On 26 March 2012 we received a request from the major beneficiary to urgently assist with her medical expenses to allow her to receive a new cornea. Given the urgency of transplant operations, the payment was needed by end of the day. A payment was made the same day directly to the beneficiary.
On 2 May 2012, we received a second request from the major beneficiary to urgently assist with receiving a second cornea. We were able to assist. On 11 July 2012 we received a request from the major beneficiary requesting assistance with driving lessons as the doctor had indicated that her eyesight is now good enough for her to drive.
Case study – prison
In March 2010 we received the major beneficiary’s termination documentation. As the value of the remaining funds was more than R100 000 we needed to make telephonic contact with the beneficiary to do a full security check prior to paying over the remaining funds.
The telephone numbers given in the termination documentation were for the beneficiary’s brother who told us that the beneficiary was incarcerated. The fund trustees recommended that we make contact with the beneficiary in prison to ask him what he wanted to do with his remaining benefit.
We attempted to make contact with the beneficiary through his brother but were unsuccessful. In June 2010 however the beneficiary made contact with our offices and on discussing his situation, he indicated that he was awaiting trial. The charges against him were however subsequently dropped and we requested proof of this in writing from correctional services. In July we received confirmation that the beneficiary was out on a warning. We then proceeded to do a final security check with the beneficiary in August and terminated his final share by the end of August 2010. He needed funds inter alia to help pay for attorneys’ fees.
Case study – promising rugby player
Funds left in beneficiary fund on termination
On 8 August 2012 we received notification from the guardian that the beneficiary, aged 19, had been offered a bursary to go to Belgium to play rugby.
On 14 August the beneficiary sent a letter of motivation as well as a breakdown of the costs that would be incurred for his trip to Belgium. The trustees authorised a payment amounting to R53 500 and wished the beneficiary well in his future endeavours. The payment was made on 18 August directly to the beneficiary.
IRF Board appointment
Giselle Gould, Fairheads Business Development Director, has been appointed to the Board of the IRF. One of her intentions is to raise the profile of beneficiary funds in the retirement fund industry. Giselle is no stranger to the IRF, having served as its CEO for five years prior to joining Fairheads in 2003.
 Protecting clients' personal information
Most companies collect, process and store clients’ personal information. This information is essential to most if not all of Fairheads business processes. With the Protection of Personal Information Bill (POPI) on the cards, companies such as ours need to consider the manner in which this Bill will affect their operations.
POPI has already been tabled in parliament and the parliamentary portfolio committee is reviewing it. According to a recent communication released by Danie Strachan, partner at Adams & Adams, some changes to the existing draft of the Bill can be expected.
Personal information includes information relating to race, gender, language, contact details, religion, physical or mental health, etc.
The Bill contains eight key principles which aim to regulate the manner in which personal information is collected, processed and stored. Security is of the utmost importance. If personal information falls into the wrongs hands it could lead to fraud or identity theft. One of the requirements of this Bill is that a company Information Protection Officer is to be appointed.
Even though the Bill has not yet been promulgated, Fairheads regards the requirements of this Bill as vital in ensuring our clients’ information is secure. Fairheads formed an internal POPI working committee earlier this year. With the assistance of our Compliance Officer, Darlene Van Dieman, who studied the Bill in conjunction with related legislation, this group compiled a working paper which identifies areas affected. Implementation of some actions has already begun in order to comply with the Bill. Darlene was appointed as the Information Protection Officer and all operational procedures are currently under review.
There is no doubt that this Bill will also present some challenges to companies, particularly around the transfer of information to foreign countries who do not have legislation governing personal information.
Fairheads is committed to upholding the requirements of this Bill and extensive education and awareness within the company is essential.
 On the highway!
Once again this year Fairheads has been visible to drivers on Gauteng highways. Here are some of the large street posters that have been displayed on the M1 near the Grayston Drive on- and offramps.
Swaziland disclaimer
It has come to our attention that a company has been formed in Swaziland under the name Fairheads Benefit Services Swaziland (Pty) Ltd and is also operating a beneficiary fund under the same name. We would like to advise that these entities have no connection with Fairheads in South Africa and advise all of our Swaziland members and guardians to continue dealing with us in South Africa regarding their benefits administered by us.
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