TRUSTEE TRAINING: Editorials: October 2019 / January 2020

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Through the maze

In our previous edition (TT July-Sept), we posed a series of
“hard questions” around the much-vaunted need for retirement-fund trustees
to be properly trained. Batseta answers them.

This is the first part of the Q&A.
The second will be published in our next edition.

When the fund industry talks of “professionalisation”, for the courses being provided, what exactly is meant?

Professionalisation advances the knowledge and practices of the specific industry. Becoming a professional person is not the exclusive right of a certain class of persons who have obtained tertiary degrees. Through education and training (both once-off and continuing) all persons such as principal officers and trustees should find a route to professional registration and designation.

Core elements that form the foundation of professionalism include:

  • Presence of a registered professional body to recommend best practice in respect the of technical and ethical competence of members;
  • Appropriate and accredited qualifications linked to the profession;
  • Appropriate and accredited qualifications linked to the profession;
  • A professional designation administered by the professional body;
  • A continuous professional development (CPD) programme to maintain skills;
  • Awareness of a duty to society as a whole.

There are two occupational qualifications registered with the Quality Council for Trades & Occupations:

  • Professional Principal Executive Officer (NQF 7 –  150 credits);
  • Professional Principal Executive Officer: Retirement Fund Trustee (NQF 5 -120 credits).

The QCTO is the certification body for these qualifications. Once completed, the qualification cannot be revoked.

Although principal officers and trustees may have other academic qualifications, they still need to be trained on their roles and responsibilities. Development and implementation of an occupational-directed qualification achieves this.

Professional persons who are members of a professional body may seek professional registration with a view to obtain a professional designation. Eligible members may apply for a professional designation or title.

Linked to the title are a number of requirements i.e. that the member must complete the prescribed qualification and maintain his/her skills and competence by following a CPD programme. If a member fails to uphold the professional registration requirements, the professional body will revoke the designation.

Batseta is the only registered professional body for principal officers and trustees. It has registered three designations/titles with SAQA, i.e. the Associate Principal Executive Officer (APEO) and Chartered Principal Executive Officer (CPEO) designations for practising principal officers and a Licentiate Trustee (LT) designation for trustees.

Eligible principal officers and trustees may apply for professional registration. The occupational qualifications are linked to the professional registration. Principal officers and trustees who qualify will receive a professional designation or title. These fiduciaries must maintain their skills and competencies by following a CPD programme.

Are different levels of professionalisation applied in training? If so, what would be the highest and lowest levels for acceptance to serve on boards?

Principal officers and trustees must be ‘fit and proper’ i.e. they must have the necessary technical knowledge to do their work and they should behave ethically. Qualifications govern the skills and knowledge required for a specific job while designations govern the skills levels and the behavior of individuals within that profession.

Professional affiliation to a professional body is a key indicator that the professional acquired the necessary skills and competence and that he/she is committed to behave in an ethical way. The latter is governed by a code of conduct.

Principal officers interested in the APEO designation must complete the trustee toolkit of the Financial Sector Conduct Authority and associated assessments whereas the CPEO must complete assessments of the occupational qualification.

By following a step-up approach all designated principal officers are following a CPD programme at their level of skill and competence. APEOs have an opportunity to progress to a higher level of skill and competence should they wish.

Designated trustees must complete the trustee toolkit and additional learning modules to qualify for the LT designation. It ensures that no trustee is excluded from achieving professional registration and that the learning eventually leads to a formal qualification.

Professional registration aims to provide principal officers and trustees with a progressive career path, whilst maintaining their ‘fit and proper’ status.

What advantages are there or the individual in moving from the lowest to the highest?

In the case of the pension-fund industry, the qualifications and designations apply to different positions i.e. the principal officer and trustee. The toolkit is an underpinning requirement for the APEO and the Professional Principal Executive Officer qualification is an underpinning requirement for the CPEO designation. The toolkit and additional learning modules are the underpinning requirements for the LT qualification.

Principal officers who register for the CPEO designation will acquire a registered occupational qualification. Trustees who register for the LT designation will commence their journey to obtain the occupational qualification registered for trustees.

Principal officers and trustees will meet the ‘fit and proper’ requirements set out in the law. They are able to learn and progress at a pace appropriate for the professional level of engagement without compromising the set standards.

Any indications of the time and effort required to attain professionalisation at the different levels? Can this reasonably be expected of people in fulltime employment?

There are two routes to obtaining a qualification and then subsequent the designation.

First is through formal accredited training where an accredited Skills Development Provider (SDP) offers classroom training courses and prepares the candidate for a final assessment that will be conducted to determine the competence of the candidate. This route will take a candidate 18 to 24 months to complete.

Second is through Recognition of Prior Learning (RPL) where a candidate has a number of years’ industry experience in a specific capacity. Through RPL a candidate can achieve the qualification and designation in a fraction of the time. It will take a candidate six to twelve months to complete the RPL programme and final assessments.

The occupational qualification comprises three components: knowledge, practical and workplace. Most of the learning takes place in the workplace during trustee board and/or committee meetings and associated engagements.

The training methodology is geared towards adult training. Sufficient support is available from mentors, SDPs and Batseta as the registered examining body.

Is there some minimum educational requirement to embark on a course for professional qualification? What of say a shop steward who doesn’t have matric but is keen to become a trustee?

For the principal officer qualification, the entry requirement is any qualification equivalent to NQF 5 level. For the trustee qualification the entry requirement is any qualification at an NQF level 4.

Candidates who do not meet the entry requirements for the NQF level 5 can complete either any NQF 4 level qualification, or the Foundational Learning Certificate through the Independent Examinations Board, and the trustee toolkit online assessment as well as additional learning RPL modules prescribed by examiner Batseta.

Can members of a fund elect as a trustee a person who has no professional qualification? If so, is it a good or bad thing?

Members of a fund can certainly elect a trustee who has no professional qualification. There have been many such trustees elected in the past and who served well.

An occupational qualification such as the PPEO: RFT is designed to equip candidates to fulfill thei fiduciary duties subsequent to their appointment as a trustee.

Is it acceptable that sponsors of umbrella funds appoint trustees, such as an experienced actuary, who has little interest in the training on offer and wouldn’t qualify in terms of it?

Sponsors are likely to appoint independent trustees who are best qualified to serve. Many are professionals in their own right, registered with such bodies as the Actuarial Society or Institute of Chartered Accountants.

These professional people, who have obtained experience in the financial industry, could certainly serve well as trustees. However, professionals who’ve completed the trustee qualification may be in a better position to succeed when applying for a trusteeship at an umbrella fund.

Why should an aspirant or incumbent trustee embark on training at all? Would he or she expect higher remuneration the higher the professional qualification or otherwise be rewarded for training courses completed?

Trustees serve their fund. Members expect them to have their best interests at heart. As professional persons, those trustees must always keep themselves abreast of new developments, changes and trends in the industry.

The aim of professional people should be to improve their skills in order to deliver a professional service, not all the time to gain higher remuneration.

Obtaining the trustee qualification may result in improved career mobility and higher remuneration elsewhere. Trustees who have been disadvantaged will now have an opportunity to study.