30 years, 30 stories: Carving a better future for the ones left behind
After 30 years’ experience as a trusted financial services provider, Fedgroup has learnt that there is no one-size-fits-all approach to meet their clients’ needs.
This is what has made them a leader in a particularly special space in South Africa: taking care of pension fund beneficiaries.
Beneficiaries must be provided for in a way that ensures they have the most sustainable, best possible opportunities that their inheritance can afford them.
In their 30 years of business, Fedgroup has always strived to live up to their ethos of going beyond basic fund administration, to provide true care for such beneficiaries.
They administer the funds in a way that ensures that beneficiaries have the best opportunities that their funds can afford them, and that their daily needs are met. By helping them build this foundation Fedgroup hopes to see them lead productive and financially stable adult lives.
It takes a certain type of ethos within a certain type of company with a certain type of person behind the scenes to provide true understanding and the personal touch in this tricky space.
But, over the years, Fedgroup certainly has a rich collection of stories to tell – and a few lessons to share – about caring for beneficiaries on their watch.
1. Legislative boundaries exist to help find the best solution for each beneficiary
Beneficiary funds have unique elements and are not entirely aligned with the Pension Funds Act that currently governs them.
When a person dies, they can leave their estate to anyone they please, but this freedom of choice does not apply to the distribution of their death benefits payable from a fund registered under the Pension Funds Act.
According to Section 37C, any person dependent on the fund member should receive a fair and equitable share of the benefit. This could include a spouse, children, parents or any other legal dependent.
Because every family unit looks different, the onus falls on the trustees of the fund to decide how the fund is distributed and take into consideration unique circumstances like foster children, common-law spouse, stepchildren or same-sex partners.
In 2017, a set of twins became Fedgroup’s youngest beneficiaries when their mother sadly passed away the day after their birth. This led to one of the issues that come to the fore when considering the unique circumstances of each beneficiary – what happens to children under the age of 18?
According to law, they are too young to receive their pay-outs directly.
“Each case needs to be judged on its merits and focus on looking after those who have lost their main breadwinner which is a big responsibility. It falls on the trustee to make sure that the beneficiaries’ best interests are a priority,” said Grant Field, CEO of Fedgroup.
Even though Fedgroup always made sure that beneficiaries were taken care of, it officially launched its Beneficiary Care department in 2009, building on an existing system that looked after the interests of minor beneficiaries by paying them an income generated by interest, while preserving their capital balance.
Fedgroup’s Beneficiary Care Manager Muhammad Jogee said “While a guardian looks after a child’s needs when a parent passes away, we take care of their funds by investing it and making sure that their investment grows to help them build a better future.”
The money that the twins’ mother left them will, through the help of Fedgroup’s Beneficiary Care, see to it that their daily needs are met. Through careful management and smart decision making, money left over by the time they reach the age of majority will help them kick-start their adult lives.
2. Every situation has its own merits
Pension funds are geared towards paying out a single lump sum on retirement, while beneficiary funds usually to pay out a monthly sum. This is a critical component of a beneficiary fund and ensures that the daily needs of beneficiaries are seen to.
However, ad-hoc requests or unexpected expenses are a reality for everyone, not just beneficiaries. In order to ensure that beneficiaries receive the care they deserve, when they need it most, Fedgroup Beneficiary Care has implemented an administrative system alongside its team of experienced administrators.
These administrators form personal relationships with the beneficiaries and, because they know the beneficiaries and their needs so well, can liaise with Trustees immediately in order to make decisions and process requests quickly, rather than wait for quarterly meetings.
3. There must be provision for contingencies
Fedgroup’s Beneficiary Care holds 2% of its total assets in cash. This means that 98% of the beneficiaries’ funds is invested for growth and the remaining 2% that is not invested ensures that beneficiaries have access to funds, as and when their needs arise.
When one of Fedgroup’s beneficiaries found a job after matric to pay for her own studies, her only wish was for a car so she could travel to work.
Fedgroup was able to help her buy her first car because having the money available and accessible in her fund meant that the administrators could provide for the contingency. Realising that she was very responsible with her money, they did all they could and assisted her with buying her first car.
4. Sometimes it is important to step up to bridge a gap
One of Fedgroup’s visions is to provide true, fulsome care for its beneficiaries – a vision that led to the creation of the Iteke Learnership Programme in 2014.
The Beneficiary Care administrators soon realised that once a minor had left school and was legally an adult, a significant gap still remained for most beneficiaries.
And in reality, there was often not enough money for tertiary education, making it difficult to start their adult lives on a positive track.
“The Iteke Learnership Programme is open exclusively to Fedgroup’s beneficiaries and provides matriculants with work experience within Fedgroup, which gives them the tools to make important career decisions,” Field stated.
“Iteke, which means ‘challenge yourself’ in Sepedi, provides learners with a year’s exposure to mentorship, work experience and a SETA-accredited tertiary qualification. The learners rotate through various departments, equipping them with a large skill set,” said Field proudly of the programme.
Basetsana Monareng, a successful Iteke graduate feels that, without the help of Fedgroup, her future would not be filled with the possibilities it is today.
“If it wasn’t for the programme, I wouldn’t be employed, I’d probably be working at a restaurant or something to make quick money. They gave me a steppingstone into my career,” acknowledged Monareng.
5. Carving a better future
As Palesa Moditambi, a former Fedgroup beneficiary and Iteke graduate, explains, “It is never part of the plan to lose your parents at a young age. Thanks to my mother’s foresight, my sister and I did not become just another statistic. She left our future in hands of experts.”
Palesa enrolled in the Iteke Learnership Programme in 2015 after the Beneficiary Care team contacted her in her matric year to ask if she would be interested in the programme, to learn how Fedgroup works and stand a chance for permanent employment.
“It was an amazing, beautiful experience. It brought me closer to the organisation, just seeing the care that they’ve given us just to ensure that we get what we need at the end of the day, it was priceless,” Palesa said.
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