Saturday, February 4, 2023

Matsheka set up own Pension Fund administration business

After quitting his job as the Chief Executive Officer of the Citizen Entrepreneurial Development Agency (CEDA), to join AON Botswana some eight years ago, Thapelo Matsheka has since quit the latter to set up his own company – Fiducia Services.

Commercially the Fiducia Services journey started in August 2017 when the company opened its doors to provide Fund Administration services to Retirement Funds.

Regarded as the first 100 percent citizen pension fund administration entity, Fiducia Services was granted operational license by the Regulator, the Non Bank Financial Institutions Regulatory Authority (NBFIRA) in the same year.

Its managing director is none other than Dr Thapelo Matsheka, a well known name in the financial services industry.

Matsheka says the core service offered by his company entails provision of a full range of professional pension fund administration services to occupational pension funds.

This include member data management, processing pension benefits to members as they fall due, providing maintaining the Fund financial accounts, secretarial services and proving benefit consultancy services around the operations of pension funds to Boards of Trustees as well as members within such retirement funds.

“Botswana has a vibrant retirement funds market which has significantly grown over the years. This industry plays a central role in not only harnessing the nation’s long term savings mobilized through members contributing into pension funds and providing financial protection,” says Matsheka.

His observation is that whilst indeed there has been significant growth and vibrancy in the investment management industry, which is another critical pillar in our industry, there has not been a corresponding increase within the Fund administration sector. He added that the result is that in spite of the fact that pension funds now account for about P76 billion of assets, prior to the entrance of Fiducia, the Fund Administration sector was only served by two entities. Matsheka is of the view that this lack of competition has no doubt come with its share of challenges around the limited choice to Pension Funds as well as general service issues.

“Fiducia was birthed out of the realization that Fund administration is a critical sector in the pensions industry and a weak Fund administration sector threatens the viability of the pensions industry,” he stated.

Matsheka says the company is about deepening and strengthening the Fund administration sector by providing Pension Funds and their members a third option.

He also realized at the very outset that members are not well informed and kept fully abreast of their pension rights and benefits. He added that Fiducia seeks to address this by providing innovative member education and financial literacy programmes in fully preparing members for the reality of retirement.

“The financial services sector has lagged behind in comparison with other sectors in its citizen participation efforts. We do believe that our entrance into the financial services sector should encourage others to come forward as we seek to deepen citizen participation in this sector,” said Matsheka

He cautioned that in the short period they have been in operation, they are concerned by what they see as a real barrier to entry where tender rules and general procurement policies, particularly for parastatal entities seem to be heavily stacked up against newly established citizen organizations. He added that they have participated in tenders for parastatal organizations where the first requirement was that the organization should have been in operation for at least 10 years. He says such barriers act against the broader national objective of deepening citizen empowerment within the financial services sector.

“The pensions industry is all about trust and integrity. We continuously review our operations to ensure that our governance structures follow best practice standards, and we have sufficient internal controls and oversight checks to protect and safeguard the member funds that we serve,” Matsheka stated.

He says they are in a sector where service issues, in general, are real operational risks facing many pension funds. He added that Fiducia seeks to exploit appropriate technologies to ensure that all its processes are automated, and that there is much greater access to information by contributing members that they serve.


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