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On an annual basis, the Board of Trustees of the BPOPF review the Fund’s Investment Policy Statement and its Investment Strategy. In cases where there is a need to make modifications and improvements, the Board will amend the policy and strategy accordingly.
In August 2022, the Board of Trustees approved the introduction of a moderate growth portfolio named Tshomarelo Member Choice Portfolio, for members nearing retirement and wishing to preserve the capital they have accumulated over their savings period. The Tshomarelo Member Choice portfolio was created to allow members to preserve their accumulated fund credits before they can switch to the Pre-Retirement Switch portfolio. This allows for reduction of risk from the Active portfolio to moderate the risk profile for the members.
THE TSHOMARELO MEMBER CHOICE PORTFOLIO HAS THE BELOW CHARACTERISTICS:
Less aggressive than the Active portfolio.
More aggressive than the Pre-Retirement Switch portfolio; this is purposefully to generate moderate returns, but at a lower risk profile as compared to the Active portfolio. In other words, it presents an inflation protection opportunity to preserve what has been generated in the Active portfolio.
The Tshomarelo Member Choice portfolio was introduced to close the gap between the Active and the Pre-Retirement Switch portfolios. Under the current structure, a member can only move to the Pre-Retirement Switch portfolio 3 years before planned retirement, and this would mean cutting down on potential returns significantly given the objectives of the two portfolios. However, with the new Tshomarelo Member Choice portfolio in place, members can gradually reduce their risks without necessarily substantially compromising on the returns.
How does the Tshomarelo Member Choice Portfolio work?
• The switch to Tshomarelo Member Choice portfolio is optional.
• An option to switch will be offered annually. Currently, BPOPF’s switching window is from 1st October to 31st January every year.
• Once an individual has opted to be moved from the Active and Deferred Member Portfolio into the Tshomarelo Member Choice portfolio, they will not be allowed to move back to the Active and Deferred Member portfolio.
• A member is eligible to opt into the Tshomarelo Member Choice portfolio from age 40.
• The eligibility age is influenced by the early retirement age for Government Employees, general age 45.
• - Members eligible to opt into the Tshomarelo Member Choice portfolio are encouraged to only make the switch into the Tshomarelo Member Choice portfolio five (5) years before their planned retirement date.
EXAMPLE A:
If an individual is planning to retire at age 60, then they are encouraged to opt into the Tshomarelo Member Choice portfolio from the year they turn age 55.
EXAMPLE B:
If one is planning to retire at age 45, then they are encouraged to opt into the Tshomarelo Member Choice portfolio from the year they turn age 40
EXAMPLE C:
There are those members where retirement age is guided by specific Acts such as BDF Act which allows for retirement after completion of 20 years continuous service regardless of age.
If a member has selected to switch into the Tshomarelo Member Choice portfolio, they are still eligible in the coming years to further reduce their risk or preserve their investments and opt to switch into the Pre-Retirement Switch portfolio, as they near retirement.