Botswana Insurance Fund Management (Bifm) conducted a training workshop for its clients who vary from trustees to principal officers of the country’s various pension funds.
Opening the workshop on Thursday, Bifm Chief Executive Officer, Tiny Kgatlwane, said the training was a continuing series of workshops which are in recognition of the critical role played by the trustees of Botswana’s pension funds, and covers topics such as investment principles, asset classes, financial markets and investment policy design.
She added that in recognition of the critical role played by the trustees of Botswana’s pension funds, Bifm – as the country’s largest asset management company with over 80 percent of all Botswana’s non-government contractual savings in its care, has over the years used the training forums to empower trustees.
“The Bifm initiative is expected to bolster decision-making of the trustees in choosing administrators, portfolio managers and monitoring their performance,” said Kgatlwane.
For her part, Money Matters Financial Consultants Managing Director, Edna Dambe, said trustees should be fully aware of the provisions made in the rules of the fund and relevant legislation and added that it will ensure that is clear at all times who has the trustee duties and responsibilities for the scheme.
Dambe stated that beneficiaries have a natural desire to maximise the amount of wealth that they will receive when the trust assets are distributed. She said that requires the trustee to actively manage the pension fund assets.
“You shall exercise the judgment and care that a person of prudence, discretion and intelligence would exercise in administering the property of others,” said Dambe.
She asked the trustees to have absolute duty to avoid any conflict of interest and stated that a trustee owes the duty to the plan’s beneficiaries first and foremost. She said it is a fundamental principle of the legal system that one who undertakes a task on behalf of another must act exclusively for the benefit of the other, putting her or his own interest aside.
“The fiduciary manages the assets for the benefit of the other person rather than for his or her own profit,” said Dambe.
According to Money Matters Consultant, John Kling, pension plan’s mission statement is to provide benefits to stakeholders such as employees and retirees, government, labour unions and service providers, including investment managers.
He cited an example of Reform Pension Board (RPB) and Pension Reserves Investment Trust Fund (PRIT).