What should trustees look for when evaluating retirement products?
Three critical factors trustees must consider to select an appropriate retirement product for members
As the obligations for trustees to select the most appropriate retirement product for their members grow more onerous, it is important to weigh up the long-term effect on total fees, including other features. This is according to Quaniet Richards, head of institutional business at Nedgroup Investments, who is passionate about addressing the confusion around fees and educating investors about the long-term effect of certain fund decisions. Richards describes the three important elements to consider when selecting a retirement product: Fees “The most important thing to be aware of is the overall impact of all fees related to a retirement fund. Paying just 1% more can have a massive impact when compounded over the years leading up to a member’s retirement and can eat away almost half of your investment in 40 years,” he says. For example, a member who earned R1-million would retire with 59% of his or her annual salary due to the effect of the fees over time, based on a total investment ...
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