Safeguarding the minor beneficiary amidst sophisticated technological advances

Sophisticated technological advances are urging on the evolution of the administration process within the retirement fund landscape. The ever-increasing automation of the administration of Retirement funds and Beneficiary funds are re-shaping how funds are administered. The question that needs to be asked is; what do these technological advances and subsequent changes in the administration process mean for those on the receiving end of the process?

Beneficiary Funds, if managed correctly, should safeguard the death benefits of a minor child, ensuring that their up-keep and education is provided for. Continuous technological advances are encouraging Administrators of these funds to adopt automated systems, thus not only reducing costs but also improving service efficiency. While this growing trend might be improving service efficiency, automating the administration of Beneficiary Funds could be threatening the service quality of the product.

Distribution of Beneficiary Funds ranges from subsistence needs which are met through monthly payments and other needs such as education which is met through ad hoc payments. While automating the process which attends to these needs may reduce the possibility of human error, there is concern about the amount of human interaction being removed from the administration process as a whole. Completely removing the “human” element seems to translate to a Beneficiary Fund just being a product and the administration process being merely a system. Removing the human element from the administration of Beneficiary Funds automatically removes the Ethic of care that ought to characterize the product. Children who have lost their parents have also lost their primary source of care. While Guardians do, to a degree fulfil this functionality, an Ethic of care should also be adopted by the Beneficiary Fund Administrators. A caring approach adopted by Administrators ensures that all aspects of the Beneficiary's well-being are safeguarded.

This concern is especially valid with regards to Beneficiary Funds being used to facilitate a Beneficiary's education as it is through an educational platform that a child's hope is ignited and dreams are built. For the child unfortunate to have lost his or her parents due to unforeseen circumstances, a Beneficiary Fund is the vehicle through which a bright future can be realised.

Furthermore, in a socio-economic environment riddled by poverty, children need to be given the roots they require for optimal development, regardless of their circumstances. Through a Beneficiary Fund, a child is ensured access to these roots. Ensuring a child's development through educational platforms is not only beneficial to the child but also automatically improves the chances of a productive South African society. Careful management of a Beneficiary Fund should ensure that a child is given the opportunity for optimal development. However, can careful management be administered by an automated system?

Is a record reflecting a Beneficiary's Grade enough to validate an education allowance? A Trustee's purpose should extend further than that. An enquiry should be done regarding the Beneficiary's progress in his or her particular grade. Furthermore, allocating an educational allowance should extend past just paying school fees. Questions such as; does the Beneficiary have the materials necessary for each Learning Area or does the Beneficiary require additional assistance in a specific Learning Area should characterise a Trustee's thinking and overall approach. These questions stem from an Ethic of Care and cannot be answered by a system that is based on a Certificate of existence or a record reflecting a Beneficiary's Grade.

Further to this, is a concern regarding who the funds are paid to. Are the funds being paid directly to the Educational Institutions or are they being allocated to Guardians to actualize the payment? It is noteworthy to question; “Who guards the Guardians”? The misappropriation of funds allocated to Guardians is not a new concern. Fueling this concern is the fact that automating the allocation process assumes that all funds will be utilised appropriately. A system cannot guarantee that the funds allocated to Guardians for educational purposes will be used 100% appropriately. A Trustee's Fiduciary duty would need to include a continuous inquiry regarding who the Guardian is and if the Guardian is utilising the allocated funds appropriately and to the best interest of the Beneficiary. Another approach would be to allocate the funds directly to the Educational Institutions themselves, thus eliminating the Guardian as a “middle-man”. Directly liaising with the Educational Institution could serve to benefit both the Trustee and the Beneficiary as both parties could be kept up to date with what is required to maximise the benefits of an Educational process.

While there are various products in the market place, it seems as if that's what they have become, just products. A Beneficiary Fund should not jus t be a product that is operated by a system. A Beneficiary Fund should be administered through personalised service characterised by an Ethic of Care so as to ensure that every aspect of a Beneficiary's well-being is safe-guarded.

For more information on Beneficiary Funds, click on the link; http://www.fedgroup.co.za/beneficiaryCare.html