Page 2 - Annexure D

TER THE PENNIES: USING COMMBENEFITS

LOOKING AFTER THE PENNIES:

USING COMMON CENTS AS A MODEL FOR

EMPLOYER BENEFITS

There is a widely known expression that says, “Look after the Pennies and the Pounds take care of
themselves”. In essence it comes down to common sense; when you focus on the small things
everything else fits in place.

This thinking is a common thread in our Employer Benefits (EB) model. So, when it’s said that we are
a disruptor or have disruptive thinking, we simply respond with – “No its common sense”. To
understand how we came to our unique EB model, our history in this market segment is vital.

Funds were, and in most cases, still are – Administrator Centric. The Administrator is the key pivot,
and everything flows from there. This is typical of your Life Offices (Old Mutual, Sanlam, Momentum
and Liberty) and the large 13B administrators such as (Alexander Forbes, NBC).
So, the answer to the first question – Do people retire because of good Administration? – is, to put it
simply; NO. In recent times the concept of Free administration has been raised, but common sense
tells you nothing is free. The cost is always hidden somewhere else.

The ultimate journey we should all be on is to retire with sufficient funds to live in the style we have
planned and funded for. This is where your company EB plan plays a major role in the ultimate sum
available to you.

So where are we different? Common sense tells us that ideally one needs to be Cost centric and
Investment centric, because those two key elements of your plan have the greatest impact on the
outcome.

What are cost drivers? Basically, we cut out hidden costs and misunderstood costs that are buried
within the structures of many funds.
Cost drivers like excessive risk benefits or poorly priced risk, excessive investment costs and
performance-based fees, that lack performance; all mean that you are not getting an amount that is