KwaZulu-Natal Joint Municipal Pension/Provident Funds: Challenges and Transformation for South African Fund as it Navigates the Future for All its Stakeholders

South Africa’s most awarded Retirement Fund, the KwaZulu-Natal Joint Municipal Pension/Provident Funds (NJMPF) proudly announced on the 1st of July 2019 that former Chief Financial Officer (CFO) of the NJMPF,  Bonginkosi Mkhize is the Fund’s first black Chief Executive Officer/Principal Officer.

Most African countries are developing countries, and South Africa, with its history of challenges and triumphs has needed to transform. The NJMPF has taken a historic move of transformation which has marked change in the organisation’s culture and future. This was a positive announcement and the organisation needed to reassure its stakeholders that their retirement benefit monies remain in good hands and the handover was without incident. The Fund has undergone many changes over the years including the composition of its Board of Trustees (BoT). Some of the changes were due to the evolving political environment in the country with the introduction of a democratic South Africa in 1994. The Trustees did not represent the members they represented fairly. The demographics have gradually changed over time and now the BoT is fully integrated from a racial and gender point of view.

The NJMPF has been providing retirement benefits for municipal employees in the Province of KwaZulu-Natal, South Africa for over 70 years. The former CFO Bonginkosi Mkhize took the helm as CEO last year in 2019, managing assets of U$D 1.2bn with a membership of 31,000 which includes current members, pensioners and dependents or beneficiaries. The beneficiaries consist of widows, widowers, and children. The Fund’s active membership base is spread throughout the Province of KwaZulu-Natal (KZN), South Africa and incorporates members in urban cities as well as semi-rural areas. The insights Bonginkosi Mkhize gained in his previous role made for a smooth leadership transition — one underpinned by an implicit commitment to strong corporate governance. His vision for the NJMPF under the converging economy and rapid development of technologies – is advanced technology facilities, lower administration fees and speedier conduction of business. Just as information technology and systems allow for the optimal performance in administration operating platforms.

“Recognition is growing about the urgent need to make a ‘just transition’ to a lower carbon economy as well as achieve the Sustainable Development Goals (SDGs) to improve the lives of growing populations.”

The NJMPF values are entrenched in assisting members and providing support where it is possible – which makes it vital for the Fund to have a healthy relationship with its membership. The robust Financial Literacy Programme is evidence of this and it continues as an ongoing project. The NJMPF understands that providing timely and succinct communication is key in upholding the Fund’s mission of providing superior retirement services. The other exciting venture the Fund is embarking on in 2020 is the Going Green project. The Going Green project forms part of a bigger project of sustainable investing. Sustainable investing is about investing in progress and recognising that companies solving the world’s biggest challenges can be best positioned to grow. It is about pioneering better ways of doing business and creating the momentum to encourage more and more people to opt into the future we are working to create. Through the combination of traditional investment approaches with Environmental, Social and Governance (ESG) insights, investors ranging from global institutions to individuals are taking a sustainable approach to pursuing their investment goals. Climate change is already a measurable global reality and along with other developing countries, South Africa is especially vulnerable to its impacts.

Globally, climate change is recognised as a real and potentially destabilising threat to economies and the well-being of people, particularly the most vulnerable. Recognition is growing about the urgent need to make a ‘just transition’ to a lower carbon economy as well as achieve the Sustainable Development Goals (SDGs) to improve the lives of growing populations. The Going Green project acts as an introduction to getting members actively involved in sustainable living which includes growing vegetables from home or getting involved in recycling projects. The NJMPF imagines that if 30,000 of its members and families are active participants in sustainability projects, it will help to make a difference in alleviating some of the problems we have in the world. The Board of Trustees have also put the task of finding alternative and sustainable ways of investing to the NJMPF Management and Fund asset managers.

In the past the NJMPF has provided its members with financial education by working with organisations such as South African Revenue Services (SARS), National Credit Regulator (NCR), Will section of attorney practice, the Pension Fund Adjudicator (PFA) and Financial Sector Conduct Authority (FSCA) to name a few.

To accommodate those who cannot or are hard of hearing the NJMPF has introduced sign language enhancements in most of the visual video communication.

Audio newsletters have been made available to accommodate not only the members with disabilities but rather those who are unable or don’t like to read – especially financial jargon that might be a challenge to understand. The newsletters are voiced by a household name in KZN South Africa – Vicky Masuku – a retired radio personality from the Ukhozi FM radio station. Ukhozi FM is one of the biggest radio stations on the planet and the largest in Africa with its listenership in constant excess of 7.7 million over the past decade. Ukhozi FM broadcasts mainly in IsiZulu and targets IsiZulu speaking and understanding audiences in South Africa. The station broadcasts nationwide and streams to the world.

Over the years the NJMPF has evolved methods used to communicate, inform, educate, and increase participation and access to knowledge for its membership. The NJMPF, has been addressing issues of Communication, Stakeholder Engagement and Education – not all at once – but rather as the landscape allowed. The focus of the NJMPF’s communication strategy is to assign information to all stakeholders about the Fund and the benefits that derive, in an efficient and timely manner, in a language the stakeholder understands. KwaZulu-Natal is populated by Zulu speaking people of about 78% compared to 13% English speaking people. The audio option is made available in both English and isiZulu, the Funds videos are also in both languages as are newsletters and some circulars.

As the membership of the NJMPF continues to grow and change, it creates a demand for different types of communication mediums to be used. This demand is based on diversity in demographics within the municipal sector which includes Age, Education, Location, and Income. Based on the demographics, appropriate ways of communicating have been introduced to meet the needs of different types of stakeholders with whom the Fund engages – this includes the NJMPF Mobile Application, website which we piloted the introduction of an audio section to it, newsletter (sent electronically and via post), factsheets, brochures, booklets and our presence on Facebook and Twitter. A new project in 2019/2020 revolves around voice recognition software, voice recording of all incoming and outgoing calls, online surveys, barcoded forms, and web chat.