Sanlam Limited · JSE:SLM
Sanlam — Sanlam Benchmark Symposium 2017
43 slides from Sanlam's conference presentation, Sep 3, 2018
Slide 1: Sanlam Benchmark Symposium 2017: hindsight / foresight
Slide 2: It is not in the stars that hold our destiny but in ourselves
It is not in the stars that hold our destiny but in ourselves William Shakespeare
Slide 3: Default Regulations – a tipping point
Default Regulations – a tipping point David Gluckman
Slide 4: Simon Sinek's Golden Circle
Simon Sinek’s Golden Circle Why do you do what you do? WHY How do you do what you do? HOW What do you do? WHAT
Slide 5: It's all about retirement outcomes…
It’s all about retirement outcomes… Despite the high membership rates for retirement funds and significant accumulated savings, only about 10% of South Africans are able to maintain the same level of consumption they had before they stopped working. Strengthening Retirement Savings Media Release May
Slide 6: How do we reform an industry?
how do we reform an industry?
Slide 7: Sanlam's practical solution going forward
Sanlam’s practical solution going forward is premised on using all of its intellectual capital to build the best multiemployer packaged retirement savings, risk insurance and administration offering in the market Sanlam Insight Magazine -September 2007
Slide 8: 1 March 2019…
| March 2019... DEFAULT REGULATIONS DECISIONS | national treasury WE. D F Y \ “f National Treasury WwW epartment EPUBLIC OF SOUTH AFRICA
Slide 9: Administrative and regulatory burden pushing employers to umbrella funds
ADMINISTRATIVE AND REGULATORY BURDEN PUSHING EMPLOYERS TO MOVE TO UMBRELLA FUNDS End of the REGULATION road for ” company UMBRELLA) FUND pension funds? | The default pension fund 4 = .)| regulations could persuade many ix employer-sponsored funds to move Sh their employees to an umbrella fund. Marti
Slide 10: The member is the customer
The member is the customer … (aka blurring of retail and institutional worlds) • Treating Customers Fairly (TCF) • PF Circular 2 of 2016 - member communication and payment of benefits • Revised policy holder protection rules • Draft PF Circular on benefit projections • ASISA standard on Effective An
Slide 11: Compliance / Better retirement outcomes
Compliance Better retirement outcomes
Slide 12: 2018 Defaults Regulations Survey
2018 Defaults Regulations Survey • Voluntary online survey • Survey opened on 27 March 2018 and closed on 22 April 2018 • Sanlam and ACA administered retirement funds • 34 questions with multiple choice responses • 109 respondents • Trustees, principal officers and consultants • Representing 35 reti
Slide 13: The road to 1 March 2019
THE ROAD TO 1 MARCH 2019
Slide 14: Will Default Regulations increase risks of being a trustee?
To what extent do you believe the Default Regulations will increase the risks of being a trustee? Answer % Definitely will 40% Probably will 27% 67% Might or might not 27% Probably will not 4% 33% Definitely will not 2% Total 100%
Slide 15: How effective will the Default Regulations be?
How effective do you think the Default Regulations will be in improving retirement outcomes for members? Answer % Extremely effective 9% 55% Very effective 46% Moderately effective 43% 45% Slightly effective 2% Not effective at all 0% Total 100%
Slide 16: Confidence fund will be ready by 1 March 2019
How confident are you that your fund can have everything in place by 1 March 2019 as required by the regulations in terms of having implemented the following? Answer Extremely likely Default Investment Strategy 80% Default In-Fund Preservation 69% Trustee Endorsed Annuitisation Strategy 53% Retireme
Slide 17: Default preservation
DEFAULT PRESERVATION
Slide 18: Anticipated increase in paid-up benefits
Do you anticipate a large increase in the number of paid-up benefits in the Fund? Answer % Yes, because the additional requirement of submitting the cash option in writing will be too cumbersome such that it will be a deterrent 12% Yes, more members will preserve their benefits as a consequence of h
Slide 19: Ongoing service of paid-up members
How should the ongoing service of paid-up members be handled by the Administrator? Answer % Via Human Resources (HR) 8% quasi-retail Directly with the member 49% servicing model Via Human Resources (HR) for a defined period after tax (i.e. 1 year) thereafter directly with the member 4% The Fund shou
Slide 20: Annuitisation
ANNUITISATION
Slide 21: Trustee-endorsed Annuitisation Strategy
Trustee-endorsed Annuitisation Strategy In order to increase the competitiveness of the market for retirement income products, to provide a greater degree of assistance to members of retirement funds who retire, and to require funds to use their considerable purchasing power and skill to provide the
Slide 22: Will the annuity strategy be the same for all members?
Do you anticipate that the Fund's Annuity Strategy would be the same for all active members at retirement? Answer % Yes 46% Maybe 33% No 21% Total 100%
Slide 23: Distinguishing the annuity strategy between member categories
If you wanted to distinguish this Annuity Strategy between categories of members what do you think would be an appropriate way to do so? Answer % Demographic profiling (age, income group) 34% Employee type (professional, blue collar, specialist) 17% Size of the Member Share 34% Contribution levels 1
Slide 24: Proportion of retirees choosing each annuity type
Please estimate what proportion (%) of retirees over the past 3 years opted for each of the following? Answer % Living annuity 64% Guaranteed annuity 29% Combination of both 7% Total 100%
Slide 25: What the Fund's annuity strategy will comprise
What do you anticipate that the Fund's Annuity Strategy will comprise? Answer % Living annuity 15% Guaranteed annuity 15% Options for either living annuities or guaranteed annuities (perhaps targeted Combination of both 70% at specific membership segments) as opposed to hybrid annuities Total 100% i
Slide 26: Compliance v Better Retirement Outcomes
Compliance v Better Retirement Outcomes High annuity quotation volumes but High annuity take-up rates and low take-up rates favourable charges
Slide 27: The Power of Scale
The Power of Scale Living annuity income drawdown 10 000 R5 000 000 consideration and 1% cost saving per annum = R50 000 extra annual pension = >R4 000 extra monthly pension Monthly income (R) Life expectancy line 5 000 Retail ILLA Institutional ILLA 0 1 6 11 16 21 26 Drawdown period in years
Slide 28: Retirement benefits counselling
RETIREMENT BENEFITS COUNSELLING
Slide 29: What is included in Retirement Benefit Counselling?
What do you understand is included in Retirement Benefit Counselling? Answer Extremely likely Written communication 29% Human Resources (HR) to provide retirement benefit counselling 14% Administrator to provide retirement benefit counselling 22% Fund will use an Employee Benefits Advisor 14% Fund w
Slide 30: Professional EB consultants positive yet sceptical
Professional EB consultants positive yet sceptical … • access to benefit counsellors was the most favoured model • 51% said no infringement on role as consultant / advisor • 76% said could be a great deal or a lot impactful on members who would not ordinarily receive financial advice • 53% said can
Slide 31: 2015 Sanlam Benchmark: Forthcoming Attractions
2015 Sanlam Benchmark • Default investment strategies FORTHCOMING ATTRACTIONS • Default preservation strategies • Default annuitisation strategies
Slide 32: Sanlam retirement mobile app
Slide 33: Sanlam member web portal home
Slide 34: Sanlam member web portal home
Slide 35: Approaching Retirement
$cc corsa eau Sanlam What it Read more Approaching Retirement Read more Read more Read more
Slide 36: Leaving your fund early
Slide 37: a d and is starti ie: ‘ ‘
a d and is starti ie: ‘ ‘ uwsofiers.al! one / to a retirement planning platfo: 's
Slide 38: The road beyond 1 March 2019
THE ROAD BEYOND 1 MARCH 2019
Slide 39: If you can't measure it, you can't improve it
If you can't measure it, you can't improve it.
Slide 40: Will benefits outweigh the increased costs?
Do you believe the benefits to members of the new Default Regulations will outweigh the increased costs? Answer % Definitely yes 24% Probably yes 30% 54% Might or might not 32% 46% Probably not 14% Definitely not 0% Total 100%
Slide 41: Retirement Fund XYZ - Default Regulations Scorecard
Retirement Fund XYZ - Default Regulations Scorecard Year ending 31 December 2020
Slide 42: Regulations will be continuously monitored and reviewed
As with any new policy or regulation, these final regulations will be continuously monitored, assessed and reviewed to enable necessary updates that ensure that members of retirement funds are protected … National Treasury Media Statement 25 August 2017
Slide 43: Nelson Mandela quote
What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead. Nelson Mandela