South Africa’s retirement fund industry increasingly operates through interconnected service ecosystems. Boards of trustees rely on administrators, insurers, asset managers, technology platforms and consulting functions, whether delivered within the same corporate group or through third-party arrangements, to give practical effect to members’ rights and benefits. This model enables scale and efficiency, but it also raises a central governance question: where does accountability truly sit when member outcomes are shaped across multiple entities?
The proposed Conduct of Financial Institutions (CoFI) framework, still in legislative development, brings this question into sharper focus. Its outcomes-based design signals a regulatory shift away from assessing institutions in isolation, toward evaluating whether the overall experience of the member, across the full-service chain, is fair, transparent and appropriate.
For boards and sponsors, this reframes oversight. Traditional performance measures, such as turnaround times, backlogs and call volumes, remain relevant, but they do not on their own answer the conduct question that is likely to sit at the centre of future supervision: can the fund demonstrate, with credible evidence, that members were treated fairly at critical moments in their journey?
In practice, these moments rarely occur at board level. They arise in death claims, disability assessments, employer onboarding, contribution allocation and rule interpretation. These processes are typically handled by administrators and operational teams, often several steps removed from the trustees who ultimately carry fiduciary responsibility for the fund.
As regulatory standards for administrators and outsourcing arrangements become more detailed, a form of governance tension emerges. Service providers are increasingly accountable as licensed and regulated entities in their own right, while boards remain responsible for the outcomes experienced by members. The practical challenge is not only whether the administrator is compliant, but whether the board has sufficient visibility into how conduct is expressed at the point of service delivery.
This is where the focus begins to move from service levels to governance insight.
In a CoFI-informed environment, board reporting becomes a key instrument of oversight. Complaints trend analysis, rule deviation logs, thematic reviews of delayed claims, data quality reporting and independent assurance findings take on a governance function, rather than remaining operational artefacts. These tools enable boards and sponsors to understand patterns of behaviour, identify points of vulnerability in the member journey and intervene before service issues translate into conduct failures.
This shift also reshapes how administration and outsourcing agreements are approached. Contracts increasingly need to support transparency and escalation, not only define scope and price. Rights of access to information, structured reporting obligations, the ability to commission independent reviews and clear controls over subcontracting become essential mechanisms through which stakeholders can demonstrate active stewardship of member outcomes.
Fairness itself, however, is not easily reduced to a checklist. Two members may experience the same delay or decision very differently, depending on their financial circumstances, understanding of the process or personal vulnerability. CoFI’s outcomes-based approach reflects this reality. It allows proportional and context-sensitive responses, but it also places greater emphasis on judgement, documentation and the ability to explain why a particular outcome was reasonable in the circumstances.
This perspective is particularly relevant for small to medium-sized employers entering the employee benefits space. For these employers, confidence in the reliability, transparency and governance capability of the broader service ecosystem is often decisive in adopting and sustaining benefit arrangements. Where oversight frameworks are clear and well-evidenced, participation becomes less about regulatory burden and more about long-term value for both employers and members.
Looking ahead, CoFI is likely to encourage a more integrated model of supervision, in which boards, sponsors and administrators are viewed as part of a single conduct ecosystem rather than as discrete, siloed entities. In such a model, the regulatory question increasingly becomes not only who performed a function, but who took responsibility for the outcome.
For boards, this creates an opportunity to differentiate through governance capability. Those that invest in transparent contracting, meaningful reporting and a shared conduct culture across their service networks are better positioned to demonstrate fairness in practice, not only in policy.
In this sense, CoFI does not merely add another regulatory layer. It invites the industry to move from managing outsourced services to actively governing member outcomes, ensuring that fairness is not only articulated, but demonstrable at every point in the value chain.