We have presented our integrated report to provide all of our stakeholders with balanced and transparent information, which can assist them in making more informed assessments of the organisation’s prospects (including its viability/ sustainability) and value creation ability into the future.
The information on Outlook is essential when reporting to stakeholders as it completes the value creation story of the Fund as told in our report, which will also continue to evolve over coming years.
Below our Outlook information covers the organisation’s strategic path ahead – the leadership’s view of the material uncertainties, disruptive factors, challenges that may affect the achievement of the strategic objectives and the potential implications for the organisation and of course the opportunities that have been identified. We present the information under each of the six capitals
| Key Challenges Legend | ||
|---|---|---|
| Increasing | Decreasing | Stable |
Financial Capital
Key Challenges
Challenges, uncertainties and disruptive factors
Changes in interest rates, fluctuations in exchange rates and volatility of stocks.
KPI
Minimum return of 10 year inflation +2%
Strategic Priorities
Committee Oversight
Measures undertaken to address the challenge:
Diversification at the overall portfolio level (fixed income, real estate and equities), as well as at asset level, especially equities.
Trend during the reporting period:
This year we witnessed recovery in markets following a challenging FY 2019/2020. The portfolio generated a 16.2% return on accumulated member savings. We also saw a recovery in the trend of collections which fell off course at the end of the last financial year. Generally, the Fund has put up a strong performance in spite of the prevailing difficult economic environment.
Outlook
Over the coming 12-36 months the Funds asset allocation will be structured to ensure stability in the returns generated for members. Our goal is to ensure that we deliver an interest on member savings that beats long term inflation by at least 2%.
Manufactured Capital
Key Challenges
Challenges, uncertainties and disruptive factors
Delays in payment of member benefits.
KPI
Our strategic target is to pay member benefits in 1 day. Over the coming 12 months we plan to move this from 8 days to 7 days.
Strategic Priorities
Committee Oversight
Measures undertaken to address the challenge:
Management is deploying the Pension Administration System (PAS) and a mobile app to create a straight through process for benefit claims.
Trend during the reporting period:
The Pension Administration System is expected to go live in September 2021. In the short term, benefits processing time is expected to average at 7-9 working days and this will drop to 1 day after the PAS go-live date. Key issues here are increasing number of beneficiaries claiming, process challenges, especially at the verification stage, system challenges with JDE (business management software) and Livelink that will be resolved when we deploy PAS and Cashflow issues especially during the peak period when interest is declared.>>read more
Outlook:
Over the coming months the Fund will deploy the PAS system that will resolve some of the process challenges around payment of benefits. Additionally, the Fund will obtain the capability to pay different types of benefits as specified in ILO convention 102. In addition, there will be a new structure to support efficient processing of benefits at a minimum cost to the member.
Human Capital
Key Challenges
Challenges, uncertainties and disruptive factors
Maintaining an agile, portable and engaged workforce. Covid-19, remote work, amendments, PAS and the rise of digital were identified as key risks that the Fund must respond to.
KPI
Staff satisfaction rating of 95%
Strategic Priorities
Committee Oversight
Measures undertaken to address the challenge:
The Fund will continue to recruit the best staff available with the requisite knowledge and skills. The HR strategy emphasises growth and retention. Initiatives to enable remote work are operational and have enabled the Fund to maintain its performance level even during the Covid-19 lockdown. Digital transformation is here. There’s no more reason to debate whether people are allowed to work from home; they’re now working everywhere. In fact, the big trend is that work comes to you rather than you going to work. Therefore, the Fund is creating a digital work experience.
Trend during the reporting period:
Staff have been and will continue to be the fulcrum to ensure a strong and sustainable Fund. During the year the Fund achieved a staff engagement score of 94.5% despite the fact that many of our staff are working remotely. The Fund is carrying out an organisation restructuring exercise in preparation for the PAS and the new operating environment.
Outlook
Learning and development will transition from traditional models to self-directed learning. Facilities to enable this have been piloted and are now fully in place. Staff will also be required to learn how to create value within the new business models.
Intellectual Capital
Key Challenges
Challenges, uncertainties and disruptive factors
Brand equity erosion due to changing customer experiences that arose from the recent rising expectations from our customers for a Covid-19 relief Fund that was not realised.
KPI
Tonality score 90%
Customer satisfaction rating 95%
Strategic Priorities
Committee Oversight
Measures undertaken to address the challenge:
The brand has engaged a robust communication strategy that is involving policy makers and influencers; continuously communicating positively to influence the thinking of its members and how they feel about the brand.
Trend during the reporting period:
The Brand has suffered negative publicity due to the debates about the NSSF amendments. The impact of this has been seen in the tonality score of 83% vs 85% target, and the Brand health rating that just broke the target at 71% vs 70% target.
Outlook:
In 2014 the Fund was recognised as a regional Superbrand. We expect that in the short to medium term the Brand will recover its position once the issue of the amendments is settled fully.
Social & Relationship Capital
Key Challenges
Challenges, uncertainties and disruptive factors
Member needs are constantly evolving; however the Fund is not flexible enough to provide adequate social risk management solutions in the form of customised benefits.
KPI
Customer satisfaction index of 95%
Strategic Priorities
Committee Oversight
Measures undertaken to address the challenge:
The Fund provided input into the NSSF Amendment Bill and it was passed by parliament. Within that bill there are clauses that will enable the Fund to provide more benefits and cover a wider range of risks faced by members. The Fund is also partnering with other institutions such as NIRA, URSB, URA and Internal Affairs to ensure that member recruitment and benefit payment is as seamless as possible. This coupled with the PAS capability will enable the Fund to achieve its objectives.
Trend during the reporting period:
The Pension Administration System (PAS) is expected to go live in September 2021. The Bill has been passed by parliament and is waiting for presidential assent into law. The strategic partnerships with NIRA, Internal affairs and URSB are operational. In the short to medium term the Fund will be able to provide a wider range of benefits and cover more risks faced by members as is provided for under ILO convention 102.
Outlook
Members have consistently requested the Fund to provide a wider and deeper range of benefits. The biggest block to this was that there was no legal instrument to support such innovation. However now there are provisions in the amendments that will enable the Fund to provide additional benefits. We have observed that members, in anticipation of this, are optimistic that this will be possible in the near future and have indicated the same by rating the Fund highly in the customer satisfaction ratings. We believe that with improved staff capabilities and efficient processes the Fund will meet customer expectations.
Natural Capital
Key Challenges
Challenges, uncertainties and disruptive factors
Slow staff adoption to sustainable energy, water and waste management.
KPI
Annual saving of 15% on water and energy bills.
Strategic Priorities
Committee Oversight
Measures undertaken to address the challenge:
Adopting a sustainable approach to waste management; and minimising our use of resources across our business, guided by our energy management policy.
Trend during the reporting period:
Total Savings:
Outlook
Over the coming year the Fund plans to move to a completely paperless operation for correspondence and internal document generation and tracking.
Given our outlook, robustness of our risk management, governance, engagement and partnering with our stakeholders, refinement of our processes to achieve exceptional turnaround times, and implementation of the PAS etc, the Fund is well poised to deliver the intended value across the capitals in the short, medium and longer term.