GIB Builds it`s Destiny

04 Apr 2012

As GIB Insurance Broking Group celebrates 30 successful years in business, the Destiny Retirement Funds, administered by GIB Financial Services, reached R550 000 000 in assets.

The Destiny Umbrella Provident Fund was established in 2000 and since then the Pension Fund and two Preservation Funds have been added to the suite of funds available to clients for the provision of retirement benefits. 

Glenn Gamsy, Managing Director of GIB Financial Services says that initially the take-up was slow but that the Destiny Funds have subsequently grown exponentially. The reason for this says Alan Coomber, Independent Chairman of the Board of Trustees of the Destiny Funds, “is because of investment results and the continuous enhancement of core administrative functions and the abilities of dedicated GIB executives and staff.” 

The move from stand-alone funds to umbrella arrangements commenced a number of years ago but it was the Pension Funds Second Amendment Act in 2001 that significantly increased the rate of conversions. Lately, many trustees have accepted that the cost of running their own fund is uneconomical, fraught with difficulties and time consuming as a result of obligations imposed on trustee boards by the Pension Funds Act and the Financial Services Board. 

On the view that umbrella funds restrict flexibility, Gamsy responds that this may have been the case previously but that many umbrella funds now provide even more options than most stand alone funds, with lower costs. 

In 2011, 30% of GIB Insurance Broking Group was acquired by black empowerment company Lephatsi Financial Services controlled by Herman Mashaba who was installed as Chairman of the Board. Because of recent consolidations in the insurance broking industry, GIB has become the largest independent broker in South Africa and shareholders are actively pursuing opportunities in order to make a number of acquisitions. 

Since inception of the Destiny Funds, it has been the Directors’ preference to grow them steadily but carefully due to inherent risks in the Retirement Fund Administration industry. This decision has proved to have been the correct one when one considers the number of administrators who have failed or who are struggling and have received administrative fines by the FSB. Nevertheless, the Destiny Funds now comprise almost 20% of GIB Group income and this figure is expected to grow over the next few years. 

When asked for the reason for Destiny`s success, Liz Botes, Operations Director comments, "watching member costs, consistent investment returns, tight administration and accountable service delivery are the secrets of our success". She goes on further to say that managing and administering pension and provident funds is highly technical which requires a team of motivated and experienced individuals to manage efficiently. She adds that GIB is now in the fortunate position of having completed many fund conversions, the experience of which is essential considering the large number of funds that are expected to transfer to umbrella funds going forward.

 

Back to News