Actuarial Society Development Trust

Overview

1.     Introduction

a.     During 2008 /9, the Actuarial Society undertook a process of consultation with key employers to discuss the basis for future cooperation between the profession and employers. During these discussions, the question of a possible Trust Fund, to be formed by the profession, was raised.

b.    It was suggested that such a Trust Fund could be used for a variety of purposes, including the channeling of donations to Universities to boost the funding for actuarial programs, the channeling of funding for key research topics of public interest and the provision of bursary funding if necessary from time to time.

c.     Initial discussions with employers suggested some broad support for such a concept, with a number of smaller employers suggesting that this could be beneficial in terms of the effective “bulking” of otherwise small donations to universities. Others were supportive of the research element.

d.    From the university perspective, while initial concern was expressed at the possible impact on existing bilateral funding arrangements between universities and employers, there was an appreciation that focused funding for actuarial academic activities may be of more benefit to the academics than current arrangements. However, they cautioned against allowing current arrangements to simply be replaced with a new structure, as some funding of actuarial programs, especially from the university itself from general revenue, may be lost in the process.

e.     The imperative for a vehicle for more effective funding of actuarial science programs at universities was further emphasized as the Actuarial Society formally launched the local actuarial professional qualification as from 2010. Effective educational programs required more formal alignment between the professional requirements and the available university programs, and agreement was reached for certain university programs to support certain courses in return for more explicit financial support for these initiatives.

f.      The Actuarial Society has accordingly established the Actuarial Society Development Trust as a registered Trust (IT255/2010) on 22 March 2010.

2.     Objectives

a.     The objectives of the Trust have been set bearing in mind the imperative that it meet the requirements of a Public Benefit Organization and ensure the tax deductibility of donations in the hands of donors.

b.    These objectives have been specified as follows:

                  i.        To provide grants to universities in order to support their teaching and research activities relating to actuarial science, and to assist in the recruiting and retention of competent academics to such programs.

                 ii.        To provide bursaries for worthy students.

                iii.        To fund research relating to actuarial knowledge in particular and broader matters of public interest related to the profession and its activities.

                iv.        To further other activities supporting the general objectives of the Trust.

c.     The nature & structure of university support grants and bursaries are set out in some detail in the Trust Deed; in particular, it envisages a direct subvention or support for academic salaries, via the university payroll, rather than a general donation to the university. Not specified in the Trust Deed, but, as part of the operating procedures to be followed by the Trustees, detailed steps are envisaged for the determination of and agreement by the university of any such support grant. It is envisaged that any such grants will be agreed following an extensive set of discussions with the universities concerned, including an agreement to a multi year plan of action relating to the provision of actuarial education at the respective universities. In this regard the Academic Liaison Committee of the Actuarial Society plays an important role in interacting with the universities and establishing the priorities with regard to their actuarial programs. The grants will be such as to ensure the recruitment and retention of competent and effective academic staff, with a primary focus on the lecturing and tuition aspects of actuarial programs.

d.    While the recommendations from the Society will be developed in consultation with the Academic Liaison Committee, the final decision with regard to the quantum of support to any program, research, or bursary provided by the Trust remains with the Trustees.

e.     It is envisaged that support grants to universities will comprise the bulk of the annual funding provided from the Trust.

3.     Interaction with other Developmental Activities

a.     The Trust is but one element of a number of initiatives with which the Actuarial Society is involved aimed at the ongoing development of new members.

b.    Other activities include:

                    i.       The “Actuaries on the Move” initiative in conjunction with the MMI Foundation, aimed at preparing talented township learners for successful tertiary studies.

                   ii.       Support provided to the Association of South African Black Actuarial Professionals (ASABA) activities aimed at the mentoring of black actuarial students.

                  iii.       Support for the South African Actuarial Development Program (SAADP) providing financial support for mainly black undergraduate students.

c.     As far as possible, the Trust will seek to complement and cooperate with these other activities.

4.     Status

a.     The Trust contains specific clauses that ensure compliance with the requirements for a PBO. Contributions to the Trust should therefore be tax deductible, subject to usual limits, in the hands of donors, both corporate and individual. The Trust has been registered with SARS as a Public Benefit Organization (reference number 930035093) and in terms of S18(A) of the Income Tax Act .

5.     Trustees

a.     The Actuarial Society appointed the initial 4 Trustees; these were Garth Griffin (Chair), Peter Doyle, Steve Handler and Wayne Dam. Thereafter, there will be up to 6 Trustees appointed by the Actuarial Society. Themba Gamedze will replace Wayne Dam in the near future. As from 2012, the Society may nominate up to 6 Trustees.

b.    The Actuarial Society determines the Chairman.

c.     The Trustees with the agreement of the Actuarial Society may amend the terms of the Trust Deed, but any such changes may not affect the status of the Trust as a PBO.

6.     Summary

a.     The proposed Trust, therefore, provides an effective vehicle for employer donations to universities, channeling funds in a structured fashion towards the key university actuarial programs; it also allows for the funding of key research projects, as well as, if required, bursaries for deserving students.

b.    The Trust will also be exploring ways to improve its BEE standing during 2012.

November 2011