Annual General Meeting

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EVERGREEN RETIREMENT FUNDS

Annual General Meeting

Cape Town20 June 2007


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AGENDA

Welcome (Marius le Grange, Old Mutual)

2006 AGM minutes for information

Chairman’s Report (Chris Liddle)

The future Trustees (Chris Liddle)

Report back from Sub-Committees (Chris Liddle)

Financial Overview for year ended 31-12-2006 (Tracy Landers, Old Mutual)

Questions

Close



CHAIRMAN’S REPORT

The SA Retirement Fund Industry

Retirement Fund Tax

Risk Management

Composition of the Management Board

Actuarial Valuation

Fund Expenses and Fees



The SA Retirement Fund Industry

National Treasury’s 2nd Discussion Paper on Social Security

& Retirement Reform

Heartened by specific reference to:

– good governance,

– transparency, and

– cost-effective administration



Retirement Fund Tax

1 March 2007

Abolishment of 9% tax on

- interest

- offshore dividends

- property rentals



Risk Management

Developed mandates of Board Sub-Committees in line with Board’s

view on risk management

Governance process based primarily on its duties in terms

of the Pension Funds Act

‘Risk-based management’

vs

‘good governance’ & ‘risk management’

2007: Sub-Committees to assess risks & formulate mitigating strategies



Composition of the Management Board

Review of structure of Boards

1st three-years term ended November 2006

New Management Board:- Independent Trustees: Chris Liddle, Jeremy Andrew (existing), Wahida Parker & Shirley Mabusela (future)

- Tied Trustees: Ozzie Osman (existing) Bertie van Wyk, Pierre Pretorius & Judy Faure (future)

- Principal Officer: Cheryl Mestern

Mickey Lowther & Jonathan Mort resigned due to work commitments



Actuarial Valuation

Valuation conducted as at 31 December 2005

Both Funds in a sound financial condition -- Pension Fund: small surplus of 0.1% - Provident Fund: marginal deficit of 0.1%

Reconciled discrepancies between assets & obligations arising from timing of admin & asset-manager systems, and use of pricing model to assign expenses and retirement fund tax

After valuation date, pricing model replaced by approach that took all expenses and tax into account. Profits and losses subsequently realised for exited members, no adverse affect on Funds



Fund expense fee of R5.00 (no VAT) – unchanged in 2007

Deducted from members’ accumulated credits

Used to meet Fund expenses, (including Trustees & Principal Officer fees)

Set-up phase:

– insufficient to cover costs

– Old Mutual subsidises to prevent future members paying current expenses

– 2006 subsidy approx R1.5m

Package option fees – unchanged in 2007

Fund Expenses and Fees



THE FUTURE TRUSTEES

INDEPENDENT TRUSTEES

Chris Liddle

Jeremy Andrew

Shirley Mabusela

Wahida Parker

TIED TRUSTEES

Judy Faure

Ozzie Osman

Pierre Pretorius

Bertie van Wyk (Chairman)



Independent Trustees

Chris Liddle (Outgoing Chairman)

Current Chair of the Evergreen Pension and Provident Funds

Spent over three decades in the Life and Employee Benefits divisions of Southern Life, departing in 1998 as Executive Director of both divisions

From 1999, served as an Independent Trustee on Boards of Retirement Funds sponsored by Old Mutual, including Evergreen Retirement Funds

Among other positions, Director and Chair of Galaxy Investment Trust and BoE Link Nominee companies, as well as Director of Catalyst Employee Benefit Consultants



Independent Trustees (cont.)

Jeremy Andrew

Internationally respected pension-fund actuary who has been closely involved with legislative and regulatory developments affecting retirement funds in South Africa.

Qualified valuator of every type of retirement fund, worked at Liberty Life from 1977 to 1988.

In 1998 became Chief Actuary to the Financial Services Board, where he helped draft surplus-apportionment and minimum-benefits legislation.

Past member of the Actuarial Society of South Africa (ASSA) and currently serves on the ASSA’s Professional Conduct Committee.




Wahida Parker

Has been Independent Principal Officer of Verso Umbrella Fund, Member of Consumer Tribunal Western Cape, Director (non-executive) of HWB Communications, Work Dynamics and The Arbitration Forum (Pty) Ltd

Former Executive Member of both the Black Management Forum Western Cape and Black Lawyers Association Western Cape

Independent Trustee of Old Mutual Pristine Retirement Fund

B.Proc in 1985, Higher Diploma in Corporate Governance

Certified Forensics Examiner in the field of forensic auditing and liquidator with Master of Supreme Court




Shirley Mabusela

Trustee and Board Member of Centre for Education Policy Development, Freedom Park Trust, Human Rights Institute of South Africa, Nelson Mandela Children’s Fund and Centre for Human Rights of the University of Pretoria

Chair of HydoWSA, consortium of women-owned companies that focus on renewable energy and mining

Former Chair of the South African Human Rights Commission

Holds a BA Social Work Degree from the University of the North, as well as a Management Diploma and Postgraduate Diploma in Advanced Social Work Practice from Wits



Tied Trustees

Judy Faure

Old Mutual Actuary and Fellow of the Institute of Actuaries

Risk Benefits Consultant to Union-sponsored funds & Fund Actuary to several Union Provident Funds from 1996 to 2000

Honorary Secretary of ASSA from 2000 to 2004

From 2004 to 2006 chaired both Old Mutual Staff Retirement Fund and ASSA’s Actuarial Governance Board Task Team

Appointed Actuary to two Old Mutual life companies, namely OMLAC (Bermuda) and OMLAC (Namibia)



Tied Trustees (cont.)

Ikhraam (Ozzie) Osman

Senior Manager responsible for Old Mutual’s Islamic Product Solutions and Member Support Services; pioneered Old Mutual’s entry into Islamic Financial Services

Head of Department of Economic Affairs and Tourism in the Free State Provincial Government from 1995 to 1997

Joined Old Mutual as Strategic Marketing Manager for Employee Benefits in 1997

Holds an Honours B. Comm. and a Wits MBA

Serves as Trustee on several Old Mutual-sponsored retirement funds




Pierre Pretorius

Member of the Old Mutual Employee Benefits EXCO since 2004

Started his career as an attorney, following which he became a Senior Legal Adviser to Transnet in 1984. By 1993 he was Transnet’s Chief Legal Adviser and a member of the Board of Trustees of the Transnet Pension Fund

In 1996 became Principal Consultant and Director of Old Mutual Actuaries & Consultants (OMAC)

A former Trustee of Old Mutual Staff Medical Aid Fund, Caremed and Galaxy Retirement Funds, serving Trustee of SARAF




Bertie van Wyk (Incoming Chairman)

After obtaining M.Comm in 1978, worked at Old Mutual Investments Division (now OMAM)

In 1989 transferred to Employee Benefits, rising to position of Senior Regional Manager

Built up Old Mutual’s business in the USA from 1995 to 1997

Held various senior positions in Old Mutual Employee Benefits, including Chief Executive of Employee Benefits from 2003 to 2005

In 2005 assumed role of Executive General Manager: Corporate Market until his retirement in 2006



REPORT BACK FROM SUB-COMMITTEES Administration and audit sub-committee

Death and ill-health retirement benefits sub-committee

Communication sub-committee

Governance sub-committee

Investment sub-committee

Legal sub-committee



Administration and audit sub-committee

Purpose

Overseeing Administrator, financial reporting, audit & actuarial

Milestones

Performance review of Administrator

Financial statements in accordance with GAAP submitted, exceeding industry norms

98% of benefits paid within 2 days of receipt of documentation

Focal areas

Provision of housing-loan sureties

Reduction of unallocated deposits

Establishment of unclaimed benefits account

Statutory actuarial valuation

Improvement in process for deduction of RFT and investment management fees

Process for transfer of assets between funds



Death & ill-health retirement benefits sub-committeePurpose

To make recommendations to Board on apportionment of death benefits and payment of ill-health retirement benefits

Focal areas

No ill-health benefit claims, 24 death benefit claims processed

Further refined claims process

Recommended umbrella trust fund arrangement

Conditions for payment to custodians/guardians

Master Rules to allow use of professional services to trace dependants; costs to be deducted from benefits



Communication sub-committee

Purpose

To ensure fiduciary duties with regard to member communication are met

Milestones

Fund’s website upgraded, more accessible: www.oldmutual.co.za/evergreen

Benefit statements with regular newsletters sent to members

New member guide published

Member education sessions, production of DVD in final stages

Strategic Challenges

Member addresses

Member committees

Disclosure of investment manager information in fund fact sheets

Educating members to make informed investment choices



Governance sub-committee

Purpose

To monitor the management of the Funds to ensure that governance objectives are met

Milestones

Publication by FSB of draft governance guidelines for SA funds based on policies and procedures developed by sub-committee and adopted by Evergreen Management Board

Focal areas

Reviewed and refined trustee code of conduct, trustee declaration of interests, fiduciary insurance, procedures for fees and expenses and risk-management strategy

Secret profits – declaration by Old Mutual

Disclosures – fees earned by independent Trustees

Board’s self-appraisal process



Purpose

To make recommendations to Board on appropriate selection of investment options within policy and to monitor performance of those options

Focal areas

Request by Symmetry to shorten period of reduced volatility prior to retirement

Opportunity for members to switch out of the CoreGrowth portfolio more than twice a year, at lower of guaranteed value and market value

Education on relationship between risk and return to minimise inappropriate selection of Low Choice Option

Full review of investment portfolios to take place in second half of 2007, with view to change default options if appropriate

Investment sub-committee



Purpose

Monitors legal risks and compliance with legislation, reviews all contracts

Focal areas

Approved amendments to Master Rules, special rules, administration agreement between the Funds and Administrator and reviewed and monitored process flow involving registration of above

Revised the sub-committee’s mandate

Established process for managing complaints against the Fund, managed two complaints

Reviewed risk policies requested by participating employers and proposed standard risk policies from different insurers.

Prepared Power of Attorney for use by members in favour of investment advisors

Provided extensive input on provision of housing-loan surety arrangement

Set in motion first partial liquidation related to members of participating employer that did not remit fund contributions

Legal sub-committee



FINANCIAL STATEMENTS

EVERGREEN PENSION FUND

Statement of funds and net assets at 31 December 2006

Revenue account for the year ended 31 December 2006

EVERGREEN PROVIDENT FUND

Statement of funds and net assets at 31 December 2006

Revenue account for the year ended 31 December 2006



Statement of funds and net assets: 31-12-2006


Total funds 2006 2005 Net assets 2006 2005



Revenue account for the year ended 31-12-2006


2006 2005



Statement of funds and net assets: 31-12-2006


Total funds 2006 2005 Net assets 2006 2005




Revenue account for the year ended 31-12-2006 2006 2005



THANK YOU

Annual General Meeting

Economy & Finance

type of retirement fund

boards of retirement

management diploma

respected pensionfund

independent trusteescont

new management board

provident funds

nelson mandela childrens