SECURE AND RISK-FREE APPROACH TO DEALING WITH EMPLOYEE RETIREMENT FUNDING, BOTH FROM EMPLOYER AND EMPLOYEE PERSPECTIVES

The fully secure nature of the international pension fund is achieved by the fund in itself not taking custody of employer contributions, made for the ultimate benefit of employees. This is outsourced to the funds’ specific providers and / or under employer special rules outsourced to an employer trusted third party provider.

This addresses the most significant conflict of interest in most domestic and international retirement funding arrangements, where the distinction between retirement fund management and actual investment management and / or asset management is not ensured for the ultimate benefit of the employee.

Explained differently, the purpose of a retirement scheme is to optimally provide for the best possible employee retirement. This is determined by primarily (a) the contributions made to the fund, and (b) growth of the assets under management.

There stands as fact that the growth of assets under management is not only determined by (i) the actual investment performance, but (ii) significantly eroded by the advisor fees charged, most often hidden advisor fees at investment level.

Instead of retirement schemes putting members first and taking exceptional care on the fees charged on investments, this being one of the key determining factors of the value, there are often sleeping on the same bed as the investment manager.

There has been an increasing legislation against such practices globally, but not an outright prohibition. We adopt this complete separation approach simply because it is the only correct approach to follow to ensure that the employee ultimately receives the correct value for retirement.

The employer is fully protected by the defined contribution nature and before an employee is accepted as a member for the fund; they have to execute indemnities. The employee is also equally protected by various insurances and risk management protocols to ensure alignment between the fund performance and their financial objectives on retirement.