In fixing the system, retirement reform is today very much on the South African agenda. Our executives have been involved in discussions with regulators on consolidating pension and provident funds and retirement annuities into a single type of retirement fund with greater tax benefits for contributors. We welcome such moves as we believe they will be good for the employee benefits sector but, most importantly, for the individual members.
Similarly, we enthusiastically endorse proposals to enforce at least partial preservation on the withdrawal of retirement funding. Both of these endeavours will go a long way towards strengthening South Africa's social protection and giving real financial peace of mind to hundreds of thousands of employees. Alexander Forbes is ready, willing and, most importantly, well prepared to help overcome the many obstacles that stand between us and the achievement of a truly effective social protection system.
A theme running throughout this report is our commitment to always serve our customers to the best of our ability, and to do so honestly, openly and fairly, securing their financial well-being. Across all businesses we have engaged with the Financial Services Board's Treating Customers Fairly framework, not in a spirit of compliance but one of enthusiasm and a belief that this framework will be good for our customers, our businesses and the whole financial services sector.
I am also pleased to report that we made very substantial progress in implementing the pillars of the Solvency Assessment and Management (SAM) framework and now believe that we will be fully ready for the implementation of this new regulatory regime on 1 January 2016.
CREATING FINANCIAL WELL-BEING
While we research and communicate at every opportunity, the Strategic Intent to which we commit ourselves is about engaging directly with beneficiaries, about putting words into practice and so fixing a broken system, one member at a time. In 2014/15 a great deal of thought, time, effort and financial resources went into preparing our group for the implementation of the Financial Well-being programme. In time, I have no doubt, Financial Well-being will come to be regarded as a watershed development not just for Alexander Forbes but for the financial services sector as a whole, such will be its profoundly positive impact.
Financial Well-being, while conceived and packaged by a leadership team that has been reinvigorated by our group's new status as a public company, will be carried out by the 4 000 Alexander Forbes foot soldiers, our greatest assets. The board and I have noted with great satisfaction the heightened engagement the company now has with its employees and the overwhelmingly positive way in which our people have rolled up their sleeves in response to their new opportunities and responsibilities. It was therefore a source of great satisfaction that we could announce this year the creation of an employee share ownership plan (ESOP) which will give all employees but especially black women a 2.9% share in the business for which they work every day to create value.
EMPOWERMENT AND TRANSFORMATION
Our ESOP was about building up to meaningful empowerment – as well as about our broad-based black economic empowerment status. Our commitment to transformation remains and will only be strengthened in the new era of our JSE listing.
Although we continued to maintain our Level 2 contributor status, we acknowledge that we still have a great deal of work to do to transform our company. In particular, there are areas of employment equity that need to be addressed and much work needs to be done on developing and empowering black-owned suppliers so that they can become fellow travellers on the exciting journey which our new Strategic Intent maps out for us.
GOVERNANCE AND RISK MANAGEMENT
Alexander Forbes is changing and so is the retirement and investment landscape. A new direction, coupled with the reforms and changes facing our industry, mean considerable opportunities but also substantial risks. At such times the quality of an organisation's leadership is of the utmost importance and I believe that our stakeholders should be assured that our group's leadership and governance are of the highest order.
At board level, subsequent to our listing, we underwent a partial changing of the guard with the appointment of three new non-executive directors while myself, two executives and four other independent directors and the senior executive leadership ensured, we believe, a considerable measure of continuity.
In welcoming Messrs O'Regan, Anderson and Kgosana to our board I commend my fellow directors for consistently displaying an energy that mirrors the zeal now evidenced throughout Alexander Forbes. In particular the board has acted decisively and with great application to strengthen our risk management policies, systems and procedures (as detailed here). As such we embrace the new 2016 – 2020 Strategic Intent with resolve and the greatest confidence.
To our clients and fund members: thank you for your ongoing faith in our business. To our new shareholders I extend a heartfelt welcome and trust that they will enjoy a rewarding and, we hope, long association with Alexander Forbes. It is with great pleasure that we have declared our maiden cash dividend of 12 cents per ordinary share.
In closing I thank my fellow directors for their unflagging support and congratulate Group Chief Executive, Edward Kieswetter, Chief Financial Officer, Deon Viljoen, and the entire executive team on a year of great achievement. Your hard work is noted and appreciated by the board of directors and by all with an interest in Alexander Forbes.
Lastly, my thanks and congratulations go to all employees of our group for their engaged commitment to work, every day, to achieve our mission, to create value for all our stakeholders.
30 June 2015