Analysis of the Draft Default Regulations Facilitator: Carlyle Field Speakers: Rosemary Lightbody John Anderson

GENERAL INTRODUCTORY DISCUSSION What is the overall objective of the regulations and are they necessary?

DEFAULT INVESTMENT PORTFOLIO – GENERAL ISSUES Specific objective of the regulation? Is this change necessary?

DEFAULT INVESTMENT PORTFOLIO – SPECIFIC ISSUES Comments regarding the current portfolios typically offered by funds…are they sufficient or do they leave room for improvement? The role of the asset manager: to what extent can trustees simply rely on the assurance of the asset/investment manager that the portfolio complies with the regulation? Can we anticipate that asset managers will formulate "tick-box" portfolios that funds can simply adopt? What challenges does the practical implementation of the default investment portfolio impose on trustees? How will trustees be expected to consider and balance the financial needs of a large cross-section of members? Does this change bring us closer to international trends? Does the regulation achieve the outcome?

DEFAULT PRESERVATION AND PORTABILITY – GENERAL ISSUES Specific objective of the regulation? Is this change necessary?

DEFAULT PRESERVATION AND PORTABILITY – SPECIFIC ISSUES Do we anticipate that the default preservation requirements will have a significant effect on the number of members who cash out vs preserve on withdrawal? Is the implementation of the default preservation changes achievable? What burdens will be placed on the member and the trustees respectively in terms of collating paid-up membership certificates? Does the extent of preservation locally leave much to be desired? If so, are there other achievable alternatives? What are the key implications and issues to consider relating to retirement benefits counsellors? Does the regulation achieve the outcome?

DEFAULT ANNUITY STRATEGY – GENERAL ISSUES Specific objective of the regulation? Is this change necessary?

DEFAULT ANNUITY STRATEGY – SPECIFIC ISSUES Are South Africans annuitising enough? Are the regulations expected to improve matters? What other key factors need to change? Are existing annuity options sufficient? Are there any shortcomings that can be improved upon? Are the proposed changes too onerous? Should we be looking towards a guidance or mandatory system in respect of the options offered by funds? What impact will these changes have on the current annuity markets and annuity providers?

DEFAULT ANNUITY STRATEGY – SPECIFIC ISSUES Is this model achievable and sustainable? What obligations does the implementation of the default annuity strategy impose on trustees and are trustees equipped to handle these obligations? What are the key implications and issues to consider relating to retirement benefits counsellors? Does the regulation achieve the outcome?

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