1. IRF ANNUAL CONFERENCE CAPE TOWN 04.09.12 (Sandile Khumalo) IT IS NOT APPROPRIATE TO IMPOSE WHISTLE-BLOWING OBLIGATIONS ON INDIVIDUAL TRUSTEES! 1

2. MAIN POINTS We are not opposed to whistle blowing We think that whistle blowing is a great idea We support PO and service provider whistle blowing We even support full board whistle blowing We do not think it is appropriate to impose it on individual trustees 2

3. PROPOSED AMENDMENTS TO THE PFA FINANCIAL SERVICES LAWS GENERAL AMENDMENT BILL, 2012 ◦ seeks to impose whistle blowing duties on service providers such as administrators and actuaries ◦ Seeks to impose whistle blowing duties on individual board members ◦ A board member must —... 3

4. PROPOSED WORDING “on becoming aware of any material matter relating to the affairs of the pension fund which, in the opinion of the board member, may seriously prejudice the financial viability of the fund or its members, inform the registrar thereof in writing.” 4

5. PROBLEM It is not clear why this obligation is imposed on individuals and not the entire board It will be first time PFA imposes obligations on individual board members Breaks away from the norm Will create divisions, uncertainty, confusion 5

6. CURRENT POSITION: BOARD MARCHES AS A BAND 6

7. THIS IS CONSISTENT WITH THE CURRENT POSITION Board is and acts as a collective Board is not a group of individuals Board speaks as one, even if other board members do not agree Decisions taken are that of the board, not individuals constituting the board 7

8. PF 130 SAYS Board members should act jointly Board members should endeavour to work together Board members should trust each other 8

9. THIS IS WHAT IMPOSING WHISTLE BLOWING DUTIES ON INDIVIDUALS DOES 9

10. 10

11. THIS KIND OF WHISTLE BLOWING COULD: Create individualism Stifle debate Create mistrust Unnecessarily hinder or delay decision making Empower stubborn trustees Hinder the proper functioning of sub-committees 11

12. LIKE THIS? 12

13. THE CURRENT SYTEM WORKS Because you have the PO acting like a referee 13

14. MR PRINCIPAL OFFICER 14

15. PROPOSED AMENDMENT INTRODUCES THIS 15

16. SO 16

17. THANK YOUS 17