By conferring self-sufficiency for life, education is an investment that mitigates economic uncertainty

Issued by Fedgroup Financial Services
Johannesburg, Jun 18, 2014

Although Section 29 of the South African Constitution stipulates that everyone has a right to basic education - and, that the right is immediately rather than progressively realisable - the cost of education often impedes that right in the case of minor children whose breadwinning parents have died.

FedGroup chief financial officer, Scott Field, believes that this is where the life insurance industry, in the form of beneficiary funds, must play an empowering role. "In our view, it's not enough for beneficiary fund trustees to ensure that funds for a minor child are used to house and feed the child adequately.

"Serving the best interests of the child should also entail equipping him or her to break out of the cycle of poverty by seeing that he or she gets a basic education."

A report from Solidarity Research Institute shows that 18% of people under the age of 30 who have matriculated earn more than R6 400 a month. Of those who go on to get a tertiary qualification, 68% earn more than R6 400.

"Clearly, education confers an advantage in the workplace," Field says. "More to the point, it equips children to become self-sufficient adults."

With this as an objective, FedGroup has proactively managed beneficiary fund monies for 22 years to ensure that thousands of children completed their schooling. Where feasible, the company pays schools and uniform, stationery, and computer suppliers directly, guaranteeing that an appropriate proportion of the beneficiary amount due to each child is used towards education. In 2013 alone, the company managed more than R12 million in education-related expenses.

The company has launched the Iteke Learnership Programme, in which qualifying beneficiaries are able to spend one year at FedGroup, gaining work experience and being mentored through the acquisition of a tertiary qualification in business administration.

"Even one extra year of study gives a young person an edge in the race for jobs," Field says. "And, gaining work experience as well as absorbing workplace culture, not only gives them insight into possible careers but makes them more attractive to potential employers."

FedGroup has employed one of its former beneficiaries, Brinny Mphogo, to head up Iteke. The son of a brick layer and a domestic worker who could not afford to send him to university, Mphogo graduated in 2013 with a BCom in corporate communications and is currently reading for his honours.

"Because an organisation saw the potential in me and chose to invest in me, I was the first member of my family to obtain a degree," he says. "Growing up, I was faced with two decisions; one: roll with the punches and see where the wind takes me, two: shape a future for myself. I chose option two. All I needed was the support FedGroup gave me. The rest was - and still is - up to me."