RAND WATER PROVIDENT FUND ANNUAL REPORT 2022-2023

PART 3 OUR MANDATE

The Rand Water Provident Fund was founded in accordance with the Pension Fund Act, 1956 (Act No. 24 of 1956) and the regulations made in terms of the Act. The Financial Services Conduct Authority, an autonomous statutory body created by Government to govern pension funds, regulates the fund. The FSCA may also publish guidelines and requirements for disclosure to assist the Principal Officer and the Board of Fund to establish and maintain adequate and effective processes of corporate governance. Our mandate is to help our members enjoy a better financial future. We exist to provide retirement and other benefits to eligible employees of participating employers, and to their nominated beneficiaries in the event of death. Our ability to fulfil our purpose rests on sound governance, faultless administration and appropriate investment performance. Given that investment performance and member-centricity are key focus elements that are closely linked to our aim of realising our ambition, we frame our value proposition around the way in which we compare to our industry peers. We strive to nurture and strengthen our relationship with stakeholders, in particular our members and participating employer. During the year under review, the Rand Water Provident Fund has continued with its mandate of providing members and their beneficiaries with retirement benefits. Everything we do as a Fund is underpinned by our guiding purpose, which is to create and sustain a tangible financial legacy for future generations by providing retirement benefits to members and beneficiaries in the event of death. Our ideal replacement ratio is 100% which is higher than industry norm, ensuring that members will be able to maintain their lifestyles when they retire. We have a reputation as a high raking fund in terms of our net replacement ratio. The Fund has a risk management framework, through which the Board establishes and oversees an effective risk management system that extends to every employee. The Finance Department is responsible for risk management and supports operations management in identifying and controlling risks. It provides reasonable assurance to management and the Board that a sound risk management framework is in place. It is the custodian of operational risk management processes like the cyber risk management, business continuity management, project risk management and investment compliance. The department also collaborates with other divisions within the Rand Water Group to ensure compliance with applicable laws and regulations. Our Risk Management framework sets out the overall philosophy, principle, requirement, and responsibilities for a sound approach to risk management and continuous internal control assurance required by the fund. The fund is aware of its responsibility for the governance of risk and has adopted this framework and implemented a system and process for the identification, evaluation and management of identified risks. This is continually reviewed and monitored by the Audit and Risk Committee to ensure that it assists in setting and achieving the fund’s objectives. Fund Risk Management

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