By: The Financial Sector Transformation Council (FSTC)The Financial Sector Transformation Council (FSTC) has officially welcomed the retirement funds industry, as represented by the Batseta Council of Retirement Funds for South Africa, as a constituent thereby significantly expanding its mandate.Isaac Ramputa, CEO of the FSTC, says this represents an important step forward in the transformation efforts of the financial sector, given the size of the procurement muscle of the retirement funds industry.The FSTC is the governing body of the Amended Financial Sector Code (FSC), which came into effect on 1 December 2017. The Amended FSC provides the financial sector with a clear roadmap on how to build on existing achievements in black economic empowerment to the benefit of all stakeholders. The FSC is also the framework against which the empowerment progress of the financial sector is measured.Currently, retirement funds are not obliged to complete and publish annual transformation scorecards despite being recognised as critical role players in the country’s economy and the transformation of the financial sector.The Broad-Based Black Economic Empowerment (B-BBEE) Act makes reference to a voluntary dispensation for top 100 retirement funds including umbrella funds, which suggests that retirement funds measure themselves annually against certain aspects of the broad-based empowerment scorecard contained in the Amended FSC.Anne-Marie D’Alton, CEO of Batseta, says now that Batseta is formally recognised by the FSTC as representative of the retirement fund constituency, it will push for compulsory reporting, at least for the country’s 100 biggest retirement funds, which represent 85% of assets under management.She says as the professional body that represents principal officers and retirement fund trustees of most of the big retirement funds, Batseta is in a very good position to influence outcomes. “Our members are the people who appoint asset consultants, asset managers and administrators and therefore have the power to transform value chains and prompt change within service providers.”D’Alton says the first step will be for the FSTC retirement funds working group to define what a compulsory scorecard should look like.“Since reporting is currently not compulsory for retirement funds, nobody has really interrogated the scorecards,” she says.“We are busy gathering information from retirement funds that will inform what these compulsory scorecards will look like. The contributions from funds are key in finding the right solutions and balance in the efforts to secure a brighter future for all. Funds have an opportunity to make their voices heard.”She says the one of the priorities of Batseta is to help retirement funds set transformation goals and implement strategies. “This will require education and training of principal officer and trustees. We are hoping to provide members with a progress update on this at the next Batseta Conference in June.”Ramputa says even though the retirement funds industry was not represented as a standalone constituent around the negotiation table that finally signed off on the Amended FSC after extensive consultation spanning many years, it is recognised as a critical enabler of transformation in the financial services industry.“We therefore welcome Batseta as a valued Council member and we look forward to engaging with this industry to achieve accelerated transformation of the financial sector to ensure a sustainable, inclusive and growing economy in South Africa.”