Financial Planning

South Africa’s largest umbrella trust and beneficiary fund assists grandparent headed households

Between 1989 and 1992 no beneficiaries of the Alexander Forbes Trust were cared for by their grandparents. Twenty years later, 11 percent of guardians caring for beneficiaries are grandparents or elderly relatives or acquaintances. This reflects national trends where more than 60 percent of South African orphans currently live in grandparent-headed households. The impact of HIV on how children are bought up in South Africa, and by whom, has resulted in a change in the type of advice and support offered to guardians.

The purpose of the Alexander Forbes Trust and Beneficiary Fund* is to ensure that children benefit from their parent’s investment and reach their full potential, as their parents would have wished.   The Trust Services team identifies as early as possible any problems that beneficiaries might be experiencing, and then intervenes to help beneficiaries resolve these problems. One of the ways to do this is to monitor school performance and attendance – always a good indicator as to how well or otherwise a beneficiary may be doing.

In cases where grandparents are not sophisticated enough, can’t spare the child help or are illiterate themselves, the child may not even attend school and has no chance of becoming a self-sufficient adult; and even where children do attend school, illiterate grandparents are often ill-equipped to support children academically, let alone plan for their future career. All these issues usually reflect in the child’s performance.

Most of the problems that Alexander Forbes encounters with managing benefits is that beneficiaries are often ignorant and lack access to information. It is particularly important that any interventions are managed through the right people in their own language if they are to be effective. In addition, elderly guardians have a much higher chance of passing away, increasing the frequency with which guardians are replaced; though replacement guardians are often aunts and uncles or siblings of the late retirement fund member, the change is disruptive for the child, often requiring intervention to maintain continuity, ensure consistent performance at school and assist the new family unit assimilate the child.

The Alexander Forbes Trust, and more recently the Alexander Forbes Beneficiary Fund, has developed intervention and support mechanisms based on 20 years of hands-on experience; it serves retirement fund members from all industries and sectors with beneficiaries covering the full spectrum of South African society, income, living conditions and provinces.

Although the day-to-day administration of beneficiaries’ benefits is outsourced, Alexander Forbes oversees the management of the beneficiary fund and has over the years trained and provided support to the administrator. Alexander Forbes’ experience in trust management is the intellectual driving force behind all interventions and sets the benchmark for beneficiary management within the industry.

The growth of the newer Alexander Forbes Beneficiary fund, to over 3,400 beneficiaries in just over a year, bears testimony to the faith that individuals and organisations have in Alexander Forbes’s ability to protect minor children’s benefits in the event of the death of a member of a retirement fund.

While the challenges of managing  money on behalf of beneficiaries are as varied as the circumstances, geographies, languages and dispositions in South Africa, having sophisticated, nuanced, and above all, tried-and-tested mechanisms to deal with these complexities makes both the Alexander Forbes Trust and the Alexander Forbes Beneficiary Fund ideally placed and uniquely experienced to manage benefits and assist  beneficiaries in the absence of parents regardless of circumstances or conditions.

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