Sanlam Limited · JSE:SLM
Sanlam — Sanlam Benchmark Symposium 2019
45 slides from Sanlam's conference presentation, 2019
Slide 1: Make retirement great again
Make retirement great again David Gluckman Head: Special Projects Sanlam Employee Benefits
Slide 2: Make retirement great again
MAKE RETIREMEN, GREAT AGAIN
Slide 3: Jose Pinera
Jose Pinera Architect of Chilean pensions reform Sanlam Benchmark keynote speaker 2007
Slide 4: 10 years at Benchmark on retirement reform
10 YEARS AT BENCHMARK ON RETIREMENT REFORM! Year Topic 2009 NSSS versus Free Market Retirement Reform 2010 2nd Umbrella Funds Benchmark Study & Charges Analysis 2011 3rd Umbrella Funds Benchmark Study 2012 Reform … the Umbrella Fund Response 2013 Retirement Fund Charges 2014 Crunch Time for Umbrella
Slide 5: How do we reform as an industry?
How do we reform as an industry?
Slide 6: 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 Sanlam Insight Magazine -September insurance and administration 2007 offering in the market
Slide 7: Harmonisation, defaults, increasing preservation
• Harmonisation • Defaults • Increasing preservation • Decreasing charges • Industry consolidation • Sponsor role clearly defined ... We imagined what the ensuing decade could look like
Slide 8: Raymond Ackerman: Doing good is good business
RAYMOND ACKERMAN PICK ‘N PAY FOUNDER “Doing good is good business”
Slide 9: Forthcoming attractions
> / @ default preservation stra * default annuitisation strat * employer level replaceme * mini-fund governance mq * asset based pricing optio Pcay* ; A AUGAR LO * lower charges e fund customisation FORTHCOMING ATTRACTIONS
Slide 10: The Final Scene
The Final Scene
Slide 11: Audience quote from Paul Tomes
“It was an unbelievable moment, when you got up from your stool and delivered the line … "would you stand up?” … I suddenly became aware of a rustle in the audience and turned round to see almost everyone in the room getting to their feet. Some people had tears streaming down their faces, … I have t
Slide 12: Shift happens
C SHIFT HAPPENS
Slide 13: Sanlam umbrella fund firsts from 2008
SANLAM UMBRELLA FUND FIRSTS FROM 2008 50% genuinely Pricing simplicity SIM Enhanced Technological No commissions independent and Tracker investment and – entirely fee for trustees transparency Balanced Fund automation service
Slide 14: Charges versus costs
Are charges to be considered, or costs? The former concern the actual levies, administration fees, or policy deductions that reduce the retirement savings of an individual over their lifetime. The latter refer to the expenses incurred by the provider of the administration or investment service. For
Slide 15: 2009 National Pensions Study
2009 NATIONAL PENSIONS STUDY “Umbrella schemes need to grow, in order to spread the largely fixed costs and investment infrastructure. The current membership of around 786,000 needs to grow to around 1.6m in order to optimise current infrastructure.” “Umbrella administrators still need to find 38% s
Slide 16: Sanlam Employee Benefits: a decade of efficiency gains
SANLAM EMPLOYEE BENEFITS - A DECADE OF EFFICIENCY GAINS Administration Costs per member per month (excluding ACA) 2009 v 2019 2009 Standalone R 37.44 Umbrella R 62.37
Slide 17: A decade of efficiency gains: inflation-proofed
SANLAM EMPLOYEE BENEFITS - A DECADE OF EFFICIENCY GAINS 2009 numbers inflation-proofed to 2019 Standalone R 62.23 Umbrella R 103.67
Slide 18: A decade of efficiency gains: 2019
SANLAM EMPLOYEE BENEFITS - A DECADE OF EFFICIENCY GAINS 2019 Standalone R46.80 Umbrella R 52.30
Slide 19: A decade of efficiency gains
SANLAM EMPLOYEE BENEFITS - A DECADE OF EFFICIENCY GAINS efficiency gains Standalone + 25% Umbrella + 50%
Slide 20: Average Sanlam umbrella fund participating employer
AVERAGE SANLAM UMBRELLA FUND PARTICIPATING EMPLOYER Members 57 Assets R 10 million Assets per member R 176,000
Slide 21: Shared values
SHARED VALUES Price increases SEB profits Provider Costs Enhanced client SEB staff contained below increased almost Down service delivery happier inflation fourfold
Slide 22: TaN
TaN
Slide 23: No zero sum game!
C NO ZERO SUM GAME!
Slide 24: Slide 24
Slide 25: Top 10 commercial umbrella fund sponsors
TOP 10 COMMERCIAL UMBRELLA FUND SPONSORS Sponsor Total Assets # Members Old Mutual R 110,836,377,720 442,145 Alexander Forbes R 79,626,293,231 381,063 MMI R 52,818,894,445 386,348 Liberty R 36,649,408,982 356,613 Sanlam R 32,091,496,403 229,380 Willis Towers Watson R 6,710,441,509 13,402 NMG R 6,224
Slide 26: R50 billion
C R50 BILLION ©)
Slide 27: Governance design debate: Jonathan Mort, Rowan Burger
Governance design debate – if we started the law and practice afresh: what should this look like for umbrella funds Jonathan Mort Jonathan Mort Inc Rowan Burger Momentum Investments
Slide 28: If the wheels fall off, who is accountable?
C if the wheels fall off, who is accountable? )
Slide 29: Ismail Momoniat and Olano Makhubela
Ismail Momoniat Deputy Director General National Treasury Olano Makhubela Divisional Executive: Retirement Fund Supervision Financial Sector Conduct Authority
Slide 30: David McCarthy
David McCarthy Advisor on Retirement Policy to National Treasury Sanlam Benchmark Keynote Speaker 2008 & 2012
Slide 31: Sanlam Employee Benefits' future and National Social Security Fund
| Sy » Weleometé the futur TTT ihe National Social Secttity:Fundiil Sanlam Employee fo ___ Benefits’ future i a ieaideonamnen ceo Positioning and research. Future Fostoning and Reseach ‘informal sector’ j ‘prudency of partially a ‘transition costs and risks’ \ ee EE — — a 4 i ali rt 34 ‘regressive n
Slide 32: President Cyril Ramaphosa
President Cyril Ramaphosa
Slide 33: Weekend Argus: comparing charges across funds
AVeekend Argus CHOOSING Se HOW YOU CAN GET THE | A RETIREMENT GROWTH YOU WANT FUND INVESTMENT? ER oo npr INAN( Sanne CHOOSING November 5, 2011 GooD VICE FOR EVERYDAY PEOPLE www.persfin. @ RESEARCHERS DEVELOP MODEL FOR ACCURATELY COMPARING CHARGES ACROSS STAND-ALONE AND UMBRELLA FUNDS Taking the gues
Slide 34: EAC or RSC?
C EAC or RSC?
Slide 35: ASISA retirement fund cost disclosures
ASISA RETIREMENT FUND COST DISCLOSURES
Slide 36: A game changer!
A GAME CHANGER! Quotation Request Product Enhancements RSC Disclosure Provider Analysis Consultant Analysis & Refinement Purchase Decision
Slide 37: Default regulations – a tipping point
DEFAULT REGULATIONS – A TIPPING POINT David Gluckman
Slide 38: Compliance, better retirement outcomes
Compliance Better retirement outcomes
Slide 39: Pension funds buy time on new rules
PENSION FUNDS BUY TIME ON NEW RULES “According to Essop, the FSCA received 90 applications for exemptions in the 17 months leading up to January 31 2019. Over February, the FSCA received 451 applications and, of these, 318 were lodged in the last week of February and 154 on the last day, he says. On
Slide 40: Member benefit claim message example
I really don’t want to discuss anything further I just want my money else I will land on the streets. Dear <member name>, sanlam is busy processing your benefit claim from your I left my work to lift my burden now provident fund. Your employer has you tell me about this nonsense. My indicated that y
Slide 41: Please don't pay me in cash
Please don’t pay me in cash … Dear <member name>, sanlam is busy processing your benefit claim from your rather pay by EFT into my provident fund. Your employer has indicated that you have chosen to receive bank account. the benefit in cash. Please respond yes to confirm or no if you disagree.
Slide 42: One industry change: principal officers
# ONE INDUSTRY CHANGE … 100 PRINCIPAL OFFICERS 1.Compulsory preservation 22% 2.Simplification of regulations 11% 3.Better leadership from FSCA 10% 4.Better member communication / education 9%
Slide 43: One industry change: independent EB consultants
# ONE INDUSTRY CHANGE … 100 INDEPENDENT EB CONSULTANTS 1.Clients to stop fixating on costs over value 21% 2.Licensing of specialist EB consultants 20% 3.Reducing compliance burden 19% 4.Reducing complexity 14%
Slide 44: Key trends for next decade
KEY TRENDS FOR NEXT DECADE 1.Institutional versus Retail 2.“Data is the new oil” 3.Security … Security … Security … 4.Fewer but better consultants
Slide 45: Make retirement great again
MAKE RETIREMEN, GREAT AGAIN