Members of umbrella retirement fund solutions will be able to assess the total impact of charges on their individual retirement benefits from next year October, when members of the Association for Savings and Investments South Africa (ASISA) implement the new Retirement Fund Standard: Effective Annual Cost (EAC) for Individual Fund Members.
The ASISA Board of Directors approved the standard last week, which means that ASISA member companies offering umbrella retirement fund solutions will start developing and implementing systems to enable disclosure at member level. Companies have until 1 October 2020 to complete implementation.
According to Taryn Hirsch, senior policy consultant at ASISA, all individual members of umbrella funds, as well as in-fund living annuities, will be able to request an EAC for their retirement benefits from October next year. She says the significance of the new EAC is that individual umbrella fund members will be able to review and compare charges on retirement fund products and then assess the impact on investment returns. “This will enable members of retirement funds to make better informed decisions around both new and existing retirement fund product choices. For example, employees will be able to factor in cost decisions when deciding on whether to allocate additional funds to either their umbrella fund or a retirement annuity”, Hirsch mentions.
Click here to download the detailed ASISA media release that explains the Standard in detail.