allAfrica.com: Namibia: Alexander Forbes Denies Milking Local Pension Funds

Alexander Forbes Denies Milking Local Pension Funds: "Financial services group, Alexander Forbes, which is facing allegations of illegally earning interest on money it handles on behalf of pension funds, was this week maintaining that it was clean in the face of growing pressure that it bulked Namibian client accounts with South African pension fund money.

The group told the Economist that its Namibian client accounts are bulked locally and, as a result, its clients earn enhanced rates. However, given the size of local pension funds industry, the bank balances are smaller, hence the benefits are relatively less than those of South African clients. In South Africa, Alexander Forbes has been accused of lawfully plundering retirement fund savings through bulking. Alexander Forbes is the largest independent administrator of pension funds in Namibia. Debbie Kotzen, the head of group corporate affairs at Alexander Forbes, said the investigation by the Financial Services Board in South Africa relates to disclosure of fees earned for bulking accounts. 'It is not relevant in Namibia as we did not earn a fee for negotiating the higher client interest rates,' said Kotzen in an email response to the Economist.

Explaining the bulking scheme, Alexander Forbes said it negotiates with banks to treat each individual retirement fund current account as part of a large group solely for the purpose of setting the interest rate that the bank will pay. The bank pays a higher interest rate based on the 'bulk' of all accounts in the group than they would on the individual accounts, thus securing a better interest rate for each of the clients."