The primary purpose of the SACCAWU Beneficiary Fund Investment Policy Statement (IPS) is to document the investment strategy and associated governance processes of the Fund as agreed by the Fund’s Board of Trustees (“Trustees”). This policy is reviewed as and when the need arises in consultation with all stakeholders.  The full document can be obtained directly from the Fund on request.

The objective of this summary is to communicate the main features of the Policy in the following format:

• Nature of the Fund
• Governance and Principles
• Roles and responsibilities of various parties
• Investment Objectives and Strategy

Nature of the Fund

The Fund is a registered beneficiary fund where monies are received from the SACCAWU National Provident Fund (“transferor fund”) for dependants and /or nominees of deceased members of the transferor fund. The board of trustees have a fiduciary duty to invest the fund’s assets for the benefit of its beneficiaries in a responsible and prudent manner. The primary objectives of the fund are to:

• Maximise the value of the benefits of members within defined risk parameters over the term (which is originally set by the fund trustees) most applicable to the member’s needs.
• Ensure that assets are available to meet the member’s requirements in the form of regular payments and secondly, to facilitate ad hoc payments in respect of the members’ maintenance, education maintenance and general well-being. 

Governance Principles

Good standard of governance ensure that the Fund’s investments are managed appropriately and will collectively reduce the risk of material failure of the investment strategy. Governance principles hence define the framework of this investment policy.

The Fund is governed by the Pension Funds Act. Regulation 28 of the Act regulates certain investment practices and principles (and imposes certain limitations). The Fund is also bound by its registered rules.

Pension Fund Circular 130 (PF130) issued by the Financial Sector Conduct Authority (FSCA), deals with recommended governance practices. While FSCA circulars are not legally binding, the Trustees recognize these as “recommended practice” and aim to adhere to PF130 as far as it is deemed appropriate to do so. The Fund’s policies pertaining to each of these governance principles are contained in Section 1 of the full document, together with extracts from Regulation 28 and PF130 (where applicable).

The Trustees recognize the increasing importance of environmental, social and governance (ESG) factors in society and the important role that institutional investors can have in ensuring responsible corporate behavior. The Fund is in the process of developing an ESG policy to be included in the full IPS document.

Roles and Responsibilities

The Trustees are ultimately responsible for decisions as to the portfolios to be used by the Fund. The Trustees cannot relinquish these responsibilities, however are permitted to delegate certain of the actions and activities related to the management of the Fund’s assets.

The Trustees are aware that they are in a position of trust, looking after money that belongs to the Fund’s members. Whenever Trustees are required to make a decision, the decision should always be in the interest of the Fund and the members rather than any third parties or the Trustees themselves.

In some cases, the Trustees will not be fully conversant with the complexity of investment matters. In this situation the Trustees will rely on expert advice including an asset consultant. The Trustees are required to critically evaluate this advice before making any decision.

Investment Objectives and Strategy

The Trustees have a statutory and fiduciary duty to invest the Fund’s assets for the benefit of the members in a responsible and prudent manner. They do this by selecting a number of asset class portfolios and allocating the member’s assets to each of these asset classes based on the particulars of each member.

The Trustee’s objective is to:

• Provide the members with the requisite monthly payments and ad-hoc payments for as long as the initial investment will allow, while
• Ensuring that the capital is preserved and, where appropriate, adequate investment growth is achieved to ensure the continuation of payments.

The Trustees recognise that members have different risk tolerances, based on their specific income and capital requirements. The term to maturity of members is one of a number of factors taken into account in determining the appropriate portfolio to match the needs of the members. The portfolios below are utilized. The split between the income and balanced portfolios will be determined by a formula derived in the modelling exercise which considers the investment time horizon of each member. Assets will be re-blended annually and liquidity reviews are conducted monthly to ensure sufficient cash holdings.

 Conclusion

The IPS has been prepared to record the issues considered by the Trustees of the Fund in establishing an appropriate investment policy for the Fund. The policy adheres to the requirements of Regulation 28 and has been established in accordance with PF130 as far as practical and appropriate. The above provides a summary of the salient points included in the full document which is available to members on request from the Fund