Your Benefit Structure


Each participating employer has his own benefit structure depending on what was negotiated between the members, the union and that employer.

This website works together with your membership booklet to set out the general benefit structure as provided under the fund as well as other important information that you must know.

The benefit structure that is applicable to your participating employer is included in the pocket at the back of your booklet.

When explaining the benefits, the structure applicable to you will be in the schedule in the pocket at the back of your booklet.

When you see this “smiley face”, you must refer to the schedule in the pocket at the back of your booklet for the benefit that refers to your participating employer.

 

Figures and Benefits used in the Examples


All examples on this website will be based on the following:



  • The insured premium rates used in this example will change from time to time. These rates are as at 1 March 2013.
  • All tax calculations applied to benefits in this booklet are based on 1 March 2013 tax tables received from the South African Revenue Service (referred to as SARS further in this booklet) and these will change from time to time. You can refer to the tax tabled under section 0 of this booklet. The calculations do not take into account any amount that you might owe SARS or that might have been used previously. You will therefore be required to check the latest tax tables issued by SARS if you wish to calculate your exact taxable amount applicable to your benefits.

How Your Fund Works

What is my Fund Credit?

A fund will refer to the amount of money that belongs to you and will be paid to you when you exit the fund. In this fund, it is referred to as your “fund credit”.

Your fund credit is the amount of money that is available to you on exit from the fund and is defined as follows:

  • Alll the contributions that you and your employer has paid into the fund on your behalf;
  • Any lump sum amount that may have been paid into the fund on your behalf, for example, a transfer from another fund;
  • Any amounts distributed to you from a reserve account that, by law, must be distributed to members;
  • Your share of the general reserve account if available to you;

    Less

  • your share of all fund expenses that will include the insurance premiums for death, disability, funeral, the fund administration fees paid to the fund administrator and any other fund-related costs such as consulting fees, trustee expenses and audit fees.

    Plus

  • the investment return / growth achieved by the fund on an annual basis as calculated by the Actuary and the trustees, together with the Actuary, declare an interest bonus that is allocated to your fund credit annually.
Am I eligible to and when do I join the fund?

The special rules of your fund defines an employee eligible for fund membership as a permanent employee of a participating employer who has not reached normal retirement age of either 60 / 65 years at the time of joining the company / fund.

As the fund is an “open” fund, the fund membership is open to any employee of a participating employer even if such an employee is not a SATAWU member.

If you are eligible to the join the fund you must join on the same day that you start working for your employer.

You cannot leave the fund unless

  • you leave your employer,
  • transfer your fund credit to another fund that you are allowed to participate in,
  • you pass away or become permanently disabled or retire.
At what age would I have to retire?

Your normal retirement date is the last day of the month in which you reach age 60 / 65 years.

It would be a good idea when you want to retire to let your employer know that at least three (3) months before to make sure that your retirement benefit is paid to you as quickly as possible after the date on which you retire.

Can I ask to retire earlier than my normal retirement age?

With the consent of your employer, you may retire early from age 55, or on the last day of any month thereafter before you reach normal retirement date. Your benefit will be your fund credit that is in the fund on the day you retire.

Also, if you are very ill and cannot continue working and the insurance company will not accept your disability benefit claim, you may be allowed to retire before or after age 55 if the fund receives acceptable and adequate medical proof that you cannot continue working.

Can I ask to retire later than my normal retirement age?

With the agreement of the employer you may remain in his service after age 60 / 65 and may continue as a member of the fund until age 70 years.

Your death benefit, disability and family funeral cover will cease at age 60 / 65. The premium for these benefits would no longer be paid to the insurer but would now be added to your retirement contributions and would increase your fund credit.

 

What contributions are paid to the fund for me?

The fund receives a contribution made by you and your employer on a monthly basis.

These contributions are calculated as a percentage of your “fund salary” and include fund expenses and insured benefit premiums.

You may also make additional contributions to the fund on a monthly basis to increase your fund credit. If you would like to pay more into the fund, please ask your employer for a form to complete. You can stop your additional contribution and start it again at any time but you will not be allowed to withdraw your additional contributions until you leave the fund.

However, your employer may be paying a premium for the other insured benefits that are not part of the contribution to the fund but that you would benefit from. You can confirm this with your employer.

The actual percentage of contribution that is paid to the fund will differ from one participating employer to another, depending on the special rules and negotiations between the employer, members and Union.

In terms of the Act, these contributions must be paid into the fund’s bank account within 7 days after the end of each month. After these payments have been made, the balance of your employer and your contribution is transferred to the investment managers and is invested according to the investment strategy that the trustees have approved for the fund.

  • You can do your own calculations by using the schedule at the back of your membership booklet that refers to your own benefit structure.
What benefit will I receive when I retire?

On retirement from the fund the fund will pay your fund credit in any of the following ways as chosen by you:

  • In cash; or
  • Part cash and part used to buy a pension (annuity) from a registered provider;
  • The full amount used to buy a pension (annuity) from a registered provider.

If you choose to buy a pension (annuity) from a registered provider, the type of pension (annuity) you choose will be of your choice. The trustees strongly encourage you to seek advice from a certified financial planner registered with the Financial Services Board.

Example (if total retirement benefit is taken in cash):

  • In terms of the Income Tax Act, if you owe SARS any money, this amount could also be deducted from your benefit by SARS before it is paid to you.
What will I receive if I withdraw from the fund?

If you leave your employer because you resign, are retrenched or dismissed before you reach your normal retirement age you will receive a benefit equal to the full value of your fund credit.

Your withdrawal benefit can be paid to you in cash or you can choose to transfer all or part of your withdrawal benefit to another registered and tax-approved retirement fund.

Please note: If you choose to take your fund credit in cash, you will pay more tax and if you choose to transfer your benefit to another tax-approved retirement fund, the tax table with the lower tax rates will apply.

Even though the government would prefer that members preserve their retirement benefits every time they change jobs, it does make allowance for people who are retrenched and need to access their retirement fund savings to support themselves while they are unemployed. Therefore, if you are retrenched, your benefit will be taxed on the lower tax table.

Although your entire fund benefit can be taken in cash (less tax), it is important to be aware that the benefit is intended for use to cover living expenses after retirement and you are strongly encouraged to preserve this amount rather than spend it. Preserving it in another registered retirement investment or transferring it to your new employer’s retirement fund does not attract any tax, whereas it is heavily taxed if taken in cash.

The trustees are aware that such decisions will depend on each member’s individual circumstances, and, if you require any assistance when making this decision, you are welcome to discuss it with your board of trustees or with a certified financial planner.

Example (if total withdrawal benefit is taken in cash):

  • In terms of the Income Tax Act, if you owe SARS any money, this amount could also be deducted from your benefit by SARS before it is paid to you.

There is an approximate 6 (six) to 8 (eight) weeks from the end of the month in which you left service before your withdrawal benefit can be paid to allow the administrator to allocate your last contribution properly and to apply for a tax directive from SARS.

Your tax details, that is, your tax number, tax office, physical address and identity number are required in order for the administrator to obtain a tax directive. Please note that no payment of benefits can be made before a tax directive has been obtained from SARS (South African Revenue Service).

If SARS does not issue a tax directive for any reason e.g. outstanding tax returns or queries, you will be advised and will have to address the query with SARS before the administrator can proceed with your payment.

Can any amount be deducted from my fund credit?

Though your benefits are protected in terms of section 37A of the Act and therefore no benefit provided for in the rules of the fund can be reduced, transferred / ceded, pledged or can be attached under any form of execution, section 37D of the Act allows the trustees of the fund to make certain deductions from your fund credit to be paid to another person as explained below:

  • For any tax that you may owe SARS;
  • For any housing loan balance that must be paid to the housing loan provider;
  • For any valid maintenance or divorce or any other court order that has been claimed against your fund credit;
  • In agreement with yourself, medical scheme contributions, insurance premiums to a long-term insurer;
  • For any claim from your employer for damages in the event of theft, dishonesty, fraud or misconduct caused by the fund member. To do this, the member must admit liability in writing to the employer or a court judgement and compensation order must be obtained by your employer against you in a court of law;
    The trustees must use reasonable discretion that the case against you is valid and that there is a chance of a successful criminal conviction for theft, fraud or misconduct. Furthermore, the trustees and the employer would be required to ensure that there is no delay in reaching a conclusion to the case.
    Only the amount stipulated in the court papers may be deducted from your benefit and the balance must be paid to you.
Can I leave my fund credit in the fund when I leave service?

The general rules of the fund do not allow you to leave your fund credit in the fund when you leave the service of your employer. On leaving the fund, you must make a decision to either transfer your fund credit to another tax-approved retirement fund or to take part or all of it in cash.

If you leave your fund credit in the fund for longer than 24 months it will become “unclaimed” and will be held in the fund in a banking type, money market investment until you claim it.

To understand more fully what you can do with your fund credit, your employer has a document that explains the various options available to you and what tax might be applicable depending on what you decide to do.

What would happen to my fund benefits if I was absent from work?

If you are absent from work without consent from your employer you may not be covered for any of the insured benefits such as the death, disability and funeral insurance cover. Such absence would include absence during an unprotected strike.

If you are absent from work with the consent of your employer, all contributions will continue to be paid to the fund and all insured benefits will remain in place. All contributions and benefits will be paid according to your fund salary at the beginning of your absence which cannot be longer than 12 months. Such absence would include absence during a protected strike.

Is there a benefit due to my family if I die before retirement?

Death is not something that we like to think about but you do need to plan for this event especially if you have family members or others who depend on you.

The fund does have a death benefit that will be paid to your dependants and / or nominees in the event of your death in service of the employer, at any time (whether at work or at home). This is an insured death benefit and the insurance premium to keep this death benefit cover in place is paid from your employer contribution.

The amount payable on your death is made up of two parts:

  • The first part is the value of your fund credit at the date of death; and
  • The second part is an amount of 1, 2, 3 or 4 times your annual fund salary at the date of death. The fund’s insurance provider pays this benefit into the fund’s bank account in return for a monthly insurance premium (taken out of your employer’s contribution).

You are covered for the death benefit until the age of 60 / 65 if you are still a member of the fund and working for your employer. If your employer has agreed to allow you to retire later and you remain a member of the fund, you may remain covered to age 70 years.

The full death benefit as explained above will be paid in cash to your adult dependants or nominees or if deemed appropriate by the trustees, into a beneficiary fund for any minor dependants or nominees. Any benefit paid in cash will be after tax has been deducted as indicated in the SARS tax tables.

The payment of your death benefit will be made in line with Section 37C of the Act that sets out how the trustees must distribute death benefits paid from retirement funds to all your dependants and nominees in a fair and equitable basis.

Section 37C guides the trustees on how to consider all your financial dependants and other nominees when distributing your death benefit.

The Nomination of Dependants and Beneficiaries Form when completed by you, is a guide that the trustees will use to try and understand who should receive your death benefit and how much each person should receive.

Please note: Therefore, if you want the board of trustees to pay your death benefit to the right people and in the correct amounts, it is very important that you guide them by completing a Nomination of Dependants and Beneficiaries Form and lodging it with your employer. It is also very important that you update the form should your personal circumstances change. Blank nomination forms can be obtained from your employer or from the fund administrators at any time. The board of trustees will take your Nomination of Dependants and Beneficiaries Form into account when allocating your death benefit as required by Section 37C of the Act.

It is also important for you to understand that your death benefit is meant to take care of the persons who are financially dependent on you. If there is enough money left after these people have been taken care of, your nominees may be considered for a portion of your death benefit.

Important definitions


These definitions will assist you in identifying who your dependants and nominees are when you complete or update your Nomination of Dependants and Beneficiaries Form.

Dependants: your spouse or an ex-spouse, natural / adopted children and any other person who is factually dependent on you financially for daily maintenance and support. A factual financial dependant could also be a parent, family member and even a friend if you have been supporting them financially before your death. A girlfriend, boyfriend or permanent life partner can be seen as a financial dependant and would therefore be taken into account in the distribution of your death benefit.

Nominees: persons, other than your dependants, to whom you would like benefits to be paid in the event of your death. Typical nominees would possibly be parents, brothers and sisters and other close relatives, friends and stepchildren or spouses of previous marriages who are not financially dependent on you. However, if you have dependants it is unlikely that the trustees would provide for payments from the fund to nominees as they will favour financial dependants above nominees.

The board of trustees can invest the benefits distributed to minor dependants in a beneficiary fund which is similar to a trust fund. A beneficiary fund is established and supervised in terms of the Act. Alternatively, the trustees may pay the allocation to the guardian / caregiver of the minor child or may consider payment to a a family trust if such trust had been nominated by you, but only if they are satisfied that the child’s interests will be adequately protected.

Any benefit allocated to adult dependants or nominees will be paid directly to them and not into your estate and, as a result, can be paid out quickly without waiting for your estate to be wound up.

Please note: The provisions of your Last Will & Testament DO NOT have any influence on the way your death benefits are distributed. In other words you cannot insert clauses in your Will that dictate how your death benefits from the fund must be distributed. The trustees are required by section 37C of the Act to follow the Act and they are not bound by any of the provisions that may be set out in your Last Will & Testament.

In determining whether any estate duty is payable, your total death benefit is added to your other assets.

If you die after you have left your employer but before you have been paid your fund credit (withdrawal benefit or retirement benefit), your dependants would have to obtain letters of executorship from the local magistrate courts and open an Estate Late bank account so that your fund credit can be paid into that account. The executor will then distribute the fund benefit to your beneficiaries.

The insurer of the death benefit cover may impose certain exclusions and in terms hereof it may not pay your death benefit if death is due to nuclear, biological and chemical warfare or sabotage or if you take part in any war, invasion rebellion, revolution, uprising, riot, civil commotion, strike, labour disturbance, seizing of power, overthrowing or influencing any government by force or terrorism.

Example: (if total death benefit is paid in cash):

  • In terms of the Income Tax Act, if you owe SARS any money, this amount could also be deducted from your benefit by SARS before it is paid to you.
Do I have a temporary disabled benefit?

If it is medically proven and accepted by the insurer that you are unable to continue working as a result of a bodily injury or illness. Such bodily injury or illness must continuously and totally prevent you from following any occupation of whatever nature with or without training and, after a four (4) week waiting period, you will receive a monthly income of up to 75% of your monthly salary.

Your temporary disability benefit will be paid by the insurer for a period of 6 or 12 months.

Four (4) week waiting period

The insurer includes a period of time known as the “waiting period” during which you may recover and if not, where all relevant medical evidence can be obtained, sent to the insurer for assessment and, if required, further medical evidence can be obtained.

The waiting period starts from the date that you can no longer attend work as result of injury or illness.

If you become temporarily disabled and are waiting for the disability benefit to be approved by the insurer, during the waiting period you will be entitled to any annual leave and / or sick pay that may be due to you and any other amount that your employer may pay to you.

The insurer will not pay any benefit during the first four (4) weeks of disability while your claim is assessed by it. It is therefore very important that you send your claim forms and all medical information to the insurer as quickly as possible after the event that caused your bodily injury or illness.

The date of your disability, as recognised by the insurer, is the date that you stopped attending work due to an illness or injury. In order to qualify for the benefit you CANNOT return to work as from the date of disability and for the four (4) weeks waiting period. If you do return to work, the date of disability would be redefined to the date that you stopped attending work again.

If there is any indication that you will be off work for an extended period (longer than 14 days) on sick leave, notification must be sent immediately to the fund administrators to advise them of a potential disability claim.

You will remain an active member of the fund until the outcome of the assessment of your claim is known. While your disability claim is being assessed by the insurer, the contributions must continue to be paid to the fund to ensure that your death, disability and family funeral benefit cover remains in place.

Once your disability income benefit commences, it continues to be paid each month in arrears, after the waiting period, until the earliest one of the following:

  • your recovery, as decided by the insurer;
  • the end of the six (6) or twelve (12) months; or
  • death.

If you die during this period, your death benefit together with your full fund credit will become payable to your dependants and nominees in accordance with section 18/19 above.

Once the insurer has accepted you as a temporary disability claimant, you will be deemed to remain an employee of the employer and you and your employer will continue to contribute to the fund. The contributions will be calculated and deducted from your temporary disability income benefit as if your salary had remained unchanged at the time of disability i.e. on 100% of your salary at that time.

Premiums payable to all insured benefits will continue during your temporary disability except the premium for the temporary disability income benefit. Any premium amount that would have been paid towards this benefit will be paid into your fund credit every month while you are receiving your temporary disability income benefit.

If you recover and return to work, the premiums for the temporary disability income benefit will have to be paid again.

If you are too ill or too injured to continue working but the insurer does not feel that you are ill enough to receive a temporary disability income benefit, you can ask the company to allow you to retire early due to ill-health at any time before your normal retirement date.

The following activities, if proved, may result in the insurer not paying out your temporary disability benefit:

  • failing to disclose all material information required by the insurer;
  • self-inflicted injury, attempted suicide or negligent or wilful exposure to danger;
  • involvement in a war, invasion, rebellion, revolution, uprising, riot, civil commotion, strike, labour disturbance, seizing of power, overthrowing or influencing any government by force or terrorism;
  • refusing to seek and follow medical advice or treatment.
  • a pre-existing condition where if you become disabled as a result of injury or illness in the twelve (12) month period after joining the fund and if the injury or illness was present during the six (6) month period immediately before joining the fund, the insurer will not pay the benefit to you. It is important to advise your employer of any possible injury or illness that may cause the insurer to exclude a benefit. Once you have been employed for longer than twelve (12) months, the pre-existing condition will be covered by the insurer once again.

Example:

 

Do I have a permanently disabled benefit?

The fund does cover you if you were to become permanently disabled because of an illness or accident whether work-related or not.

Before the employer can apply for a permanent disability benefit on your behalf, you will have had to be totally, permanently and continually prevented from:

  • following any occupation of whatever nature and experiences loss of income even with further in-service training; or
  • use of both eyes, or both hands, or both feet, or one hand and/or one foot.

If the insurer is satisfied that you are totally and permanently disabled, you will, after a seven (7) or thirteen (13) month waiting period has expired, receive a lump sum disability benefit in cash.

Your permanent disability benefit will be equal to your:

  • Full fund credit; and
  • A lump sum disability benefit equal to 1, 2, 3 or 4 times your annual fund salary.

The insured portion of the permanent disability benefit will reduce on a sliding scale if you are within five (5) years of your normal retirement age

The following activities or events, if proved, may result in the insurer not paying out your total and permanent disability benefit:

  • Failing to disclose all material information required by the insurer;
  • involvement in a war, invasion, rebellion, revolution, uprising, riot, civil commotion, seizing of power, overthrowing or influencing any government by force or terrorism; refusing to seek and follow medical advice or treatment.
  • A pre-existing condition where if you become disabled as a result of injury or illness in the twelve (12) month period after joining the fund and if the injury or illness was present during the six (6) month period immediately before joining the fund, the insurer will not pay the benefit to you. It is therefore important to advise your employer of any possible injury or illness that may cause the insurer to exclude a benefit. Once you have been employed for longer than twelve (12) months since the commencement of the insurance cover, the pre-existing condition will be covered by the insurer once again.

If you are too ill to continue working but the insurer does not feel that you are ill enough to receive this total and permanent disability benefit, you can ask your employer to allow you to retire early due to ill-health at any time / age before your normal retirement date / age.

Please note that if your claim is not successful and you leave service of your employer on grounds of incapacity, you will be treated as an withdrawal from service and you become entitled to your fund credit. Thereafter, you will have no further claim on the fund.

Example:

  • In terms of the Income Tax Act, if you owe SARS any money, this amount could also be deducted from your benefit by SARS before it is paid to you.
Am I or my family covered for family funeral benefit?

A family funeral benefit scheme is available for you and your immediate family and the scheme will pay an amount as indicated below to assist with funeral arrangements:

Please note: Only one (1) spouse will be covered at any one time. However, if your spouse dies and you take another spouse, the second spouse will be covered.

Paid up benefit: In the event of your death or permanent disability in service of your employer before your normal retirement date the insurer will provide you (if disabled) and your one spouse and children with a funeral policy for the same funeral benefits without further premium payments in respect of this funeral benefit.

This benefit will be payable to the date that you will (if disabled) or would have reached age 60 / 65. All the same terms and conditions that apply to the family funeral benefit will remain in place for the paid-up benefit such as termination ages.

You (if disabled) or your family will have to provide the insurer with the family members names, identity numbers and contact details at the time of your disabiliy or death to qualify for these benefits within three (3) months of your disability or six (6) months of your death.

Definition of an eligible child

Unmarried biological children, a stepchild (biological child of spouse), a posthumous child (biological unborn child), a foster-child (legally), a legally adopted child or a stillborn child (after the 26th week of pregnancy) who is under age 21.

The age of 21 years is extended to 25 if still a full-time student at a recognised educational institution.

The age of 21 is extended to death if the child became mentally or totally and permanently disabled before age 21 or under age 26 while a full-time student at a recognised educational institution.

Definition of a spouse

A person married to the member in accordance with the Marriage Act, 1961, the Recognition of Customary Marriages Act, 1998, the Civil Union Act, 2006, the tenets of religion.

Also included is a life partner if the parties have been together for at least 6 months or more.

It is recommended that details of any children of the common law spouse, illegitimate children and stepchildren be given to your employer at the date the principal member (you) joins the scheme or within one (1) month of the dependant becoming eligible for funeral benefit cover. Alternatively, a claim for a benefit must be supported by proof satisfactory to the insurer that the dependant fits the definition of child as stated in this booklet.

The insurer will pay the funeral benefit to one of your family members as indicated by your employer.

The insurer may exclude funeral benefit claims aising from your involvement in a war, invasion, rebellion, revolution, uprising, riot, civil commotion, strike, labour disturbance, seizing of power, overthrowing or influencing any government by force or terrorism.

Is there a repatriation benefit available to me?

The insurer recognises the importance of assisting you and your family members during a time of loss. The Burial Repatriation Benefit is a service that allows for the transport of the deceased member’s body back home to the final funeral home closest to his place of burial in South Africa, if the death occurred far from your home. Special cultural preferences have been taken into account and the funeral benefit provider will take special care to meet these preferences.

This is a free service, available on the death of yourself or your family listed members and is covered by the funeral benefit scheme.

The service includes:

Transportation of the deceased body


Via road or air, to the funeral home closest to the place of burial in South Africa, transport is available from anywhere in South Africa, Lesotho, Swaziland, Zimbabwe, Botswana, Namibia or Mozambique (south of the 22º latitude):

Accompanying the deceased


If death occurs in South Africa, the service also allows for:

  • transportation arrangements for a single relative to accompany the mortal remains to the final funeral home; and
  • overnight accommodation* for a single relative.

*Subject to limitation

Other services


Other services, which are aimed at simplifying the death/burial for the family, include:

  • assistance and advice on claims procedures are provided to the surviving family;
  • if necessary, legal assistance can be arranged to assist with the interpretation of the Will and the management of the necessary documentation;
  • advice will be provided on matters such as obtaining a death certificate and cross-border documentation;
  • referral to a pathologist will be made if an autopsy is necessary;
  • referral to reputable funeral parlours and providers of other funeral services such as catering and transport can be made, and
  • assistance can be provided when looking for a tombstone supplier.

How can I arrange for this service?

These services are available 24 hours a day, 7 days a week.

Your next of kin can access this benefit, either by themselves or via the member’s employer, by calling our 24-hour specialised call centre on:

086 0004 080

Calls can be answered in any one of the official South African languages.

The information required to process the claim:

- Name and ID number of the deceased
- Place where death occurred

Does the fund offer loans for housing purposes?

The fund does offer you loans for housing purposes ONLY. The trustees of the fund have the power to give a guarantee for a loan that is provided through a third party housing loan institution to assist you in buying or renovating your home. Section 19(5)(a) of the Act governs these loans.

The fund will place a portion of your accumulated fund credit as security to the housing loan institution that provides the housing loan. Your retirement money therefore remains in the fund and you repay the loan to the housing loan Institution in accordance with your agreement with the housing loan institution.

However, if you resign, retire or die before you have fully repaid the loan the outstanding amount of the loan will be paid from your fund credit before you or your dependants can be paid the balance of your fund credit.

Should you remain at the same employer until normal retirement age, your loan should be paid off and your full retirement benefit will be paid to you.

The rules and conditions of this scheme are:

  • Loans must be used for housing as stipulated in Section 19(5) (a) of the Act;
  • The housing loan institution will apply the terms and conditions of the National Credit Act before approving the housing loan;
  • Participating employers must sign an agreement with the housing loan institution to deduct the loan repayments and forward them directly to the housing loan institution;
  • The minimum take home net salary of an applicant for a housing loan is R1 000.00 per month;
  • Minimum loan amount is R2 000.00;
  • Maximum loan amount is 60% of member’s accumulated fund credit, subject to repayment not greater than 25% of member’s gross salary;
  • Repayment period cannot be longer than your normal retirement date;
  • Interest rates on housing loans are negotiated with the loan institution;
  • Members placed “under administration” by the courts because of indebtedness, will not qualify for a housing loan from the fund.

It is important to note that loans are made for housing purposes only

You must own or co-own the house and you or your dependants must live in the property

PLEASE NOTE THAT IT IS A CRIME TO DEFRAUD THE HOUSING LOAN FACILITY FOR OTHER PURPOSES

Insurance to cover any outstanding housing loan


The fund offers you the option to take out credit life insurance that would cover any outstanding balance of your housing loan in the event of your death or permanent disability. This means that, in the event of you becoming disabled or if you die, the outstanding amount will be settlted by the credit life insurer. The fund will not have to pay the outstanding balance of the housing loan to the third party housing loan institution.

What are the fund investments and how do they work?

It is important that, over the long term, the fund assets invested with the fund’s asset managers provide growth that is higher than the rate of inflation as measured by the Consumer Price Index (CPI). If this is achieved it means that the growth of investments of the fund is higher than inflation and your retirement savings are growing in “real” terms. This therefore means that the buying power of your money will increase over the long term.

To achieve their investment objective, the trustees spread the fund assets by making use of various registered asset managers to invest the monies of the fund. The current investment strategy is to invest the assets as follows:

The target is CPI + 4%p.a. over three-year rolling periods for active members

Socially desirable investments: 10% allocation
Absolute return funds: 75% allocation
Pure equity assets: 15% allocation

To remove the fluctuations from investment returns that may return negative growth to members’ fund assets, the trustees consider the total fund growth, then, together with the Valuator, they discusses the final interest rate to be declared for the year ending 31 January, an interim interest rate to be applied from 1 February, and an interest rate to be applied to delayed benefit payments.

The trustees meet on a quarterly basis to review their investment strategy in order to make sure that their investment objectives are met.

The fund has provided members with above-average investment returns over the past years as shown below:

The trustees also recognised that the protection of unclaimed benefits should not affect the investment strategy for active members and therefore the assets in respect of the unclaimed benefits (benefits not claimed within 24 months of accrual date) are invested in a separate guaranteed portfolio where these assets are not overexposed to fluctuations of the investment markets.

Do I pay tax on any of my fund benefits?

All benefits received from the fund are subject to tax. However, benefits are taxed more favourably when a member retires. For this reason, it is preferable to preserve your benefit by transferring it to another retirement fund when exiting the fund.

Death, disability and withdrawal benefits paid as a result of a member’s involuntary retrenchment are taxed on a more favourable basis.

This is the Government’s way of encouraging people to save towards retirement as tax payment is held over until the actual benefit is paid.

It is very important that you understand the tax implications when deciding how to leave the fund i.e.

  • taking cash,
  • transferring to another retirement type product, or
  • purchasing an annuity.

The following tax tables explain the amount of tax that you will have to pay on your fund credit when you leave the fund.

Please note that these tables change from time to time and it is important to obtain the latest table when calculating your taxable amounts applicable to your fund benefits.

Table for taxation of cash withdrawal (leaving service) benefits:

Table for taxation of lump sum retirement, retrenchment and death benefits:

*Please note that you can only claim the tax-free amount once. Therefore, if you have previously received any tax-free portion when exiting a fund i.e. the R22 500, this will be deducted from further tax-free amounts that you may be entitled to when you retire. The same applies to the R315 000 tax- free amount at retirement. If you have other retirement funds or annuities etc., you will only be entitled to a once-off tax-free amount of R315 000 from all of them. Your Certified Financial Planner will be able to assist you with this calculation.

Disability


The monthly income received is subject to normal income tax.

Tax implications on fund and insured risk benefits


Any contributions that were made to the fund and were not previously allowed as a tax deduction would be added to the tax-free amount.

You are, once again, urged to take professional financial advice on your options and the tax implications whenever a benefit becomes due. Kindly contact the trustees or the administrator if you require assistance in getting the services of a certified financial planner.

Fund Service Providers

The board of trustees has chosen the following service providers for the fund:

Service Provider   Name
Administrator   Robson Savage (Pty) Ltd.
Actuary   Mr Neil Savage, Robson Savage (Pty) Ltd.
Consultants:   Robson Savage (Pty) Ltd.
Auditors:   Mokwena and Partners Chartered Accountants (SA)
Insured Benefits:   Sanlam Group Risk Benefits
Beneficiary Fund:   Bophelo Benefit Services (Pty) Ltd.
Bankers:   Standard Bank
Fidelity Insurance:   Camargue Underwriting Managers (Pty) Ltd.
Investment Managers:   The trustees review the investment managers each year and may make changes to them from time to time. The current investment managers are shown in your member benefit statement.

To ensure efficiency of service and price, the trustees continually monitor all service providers. Therefore, these service providers may change from time to time as deemed necessary by the trustees.

Again, to ensure the protection of members all retirement fund administrators, auditors, actuaries, consultants and asset managers must be registered with, and/or approved by, the Financial Services Board and they must meet strict requirements set by the Financial Services Board.

What administration procedures are in place?

Withdrawal benefits (resignation, retirement, death or disability)


When the administrator has received notification for a withdrawal and has received your final contribution, deducted the expenses and added the investment return, your full fund credit will be disinvested from the investment portfolio and will be held in the fund’s bank account until the money is paid in accordance with your instruction.

This method has been adopted to avoid the possibility of a benefit reducing as a result of a negative return in the investment market between the date of leaving and date of payment and is in line with the Financial Services Board guidelines on best practise.

The fund’s bank rate of interest, less expenses, will be paid to you and will apply from the time your fund credit has been disinvested to the date of the final tax application and payment to you.

Your benefit should be paid to you 8 weeks after the end of the month that you last worked.

Death claims


Your employer has twelve (12) months from date of death to advise the insurer of the claim.

Disability claims


Your employer has three (3) months from the date that you are thought to be temporarily disabled and six (6) months from the date that you are thought to be permanently disabled to advise the insurer of your claim. In both instances, it would mean the date that you did not return to work due to an illness or accident.

Funeral claims


You will need to submit the documentation required by the insurer within six (6) months of the death before the claim can be paid.

Faxed copies of death certificates must be clearly certified. Documents certified by a Commissioner of Oaths must clearly reflect the name, signature, organisation, date, address and telephone number of the Commissioner of Oaths.

What documentation is required for a claim?

  • The X with a * next to it means the document must be certified.
  • Documentation for dependants must also be forwarded for all death benefits to be paid. These will be advised when required.
  • If a member dies after he has left service, the dependants must obtain a letter of Executorship from the court and must open a bank account in the name of the Estate Late.
Trustees recommendations for financial peace of mind

The trustees have a number of recommendations for you to make your and your family / dependants’ lives easier by doing the following:

  • Always keep your affairs in order with proper records and documentation.
  • Summarise your financial position listing all your assets and liabilities.
  • SARS features in everyone’s life and you are urged to resolve any disputes directly and timeously with SARS.
  • Make a Will that is properly executed and that reflects your updated wishes of what must happen to your assets of your death.
  • Complete the Nomination of Dependants and Beneficiaries Form and hand to employer for safe-keeping. All dependants and persons you support financially must appear on that form. Update the form when changes occur.
  • Fund Credit payable on withdrawal from service should always be preserved for your retirement.
  • Always check your decisions with a certified financial planner registered with the Financial Services Board.
  • Read and understand this booklet or ask questions.
Financial advice

Before you receive a benefit from the fund you should seek professional financial advice to ensure that you understand all the options available to you.

You also need to understand the tax implications of the various options and make informed decisions when re-investing your benefit.

It is important to consult with a certified financial planner when you want to exit the fund. If you do not have your own, you can find a list of qualified planners on the Financial Planning Institute of Southern Africa Website – www.fpi.co.za.

Alternatively, Ian Jacobs, a certified financial planner who has a close working relationship with Robson Savage, is available to consult to members. He may be contacted via any of the following:

Telephone:  011 643 4520
Cell:  082 568 3055
Email:  ianj@robsav.com

Remember, the decision is your own therefore it is important that you make sure that the financial planner you are entrusting your finances to be registered with the Financial Services Board.

Who are my fund administrators?

Robson Savage is the administrator and consultant of your fund.

This address is also the registered address of the fund.

If you would like to contact them, please do so on the contact details provided below:

Company name:  Robson Savage (Pty) Ltd.
Physical Address:  24 Wellington Road, Parktown, 2193
Postal Address:  P. O. Box 3041, Houghton, 2041
Telephone Number:  011 643 4520
Fax:  011 643 4535
E-Mail:  home@robsav.com
Website:  www.robsav.com
FIAS and FSB No:  16359 & 24112
Who is the administrator of the beneficiary fund?

On your death, a portion of the death benefit paid from the fund may be transferred to a beneficiary fund in respect of a minor dependant or, with consent, on behalf of a major dependant.

The guardian or major dependant may contact the administrator of the fund who will be able to provide contact details of the administrator of the beneficiary fund.

What must I do if I have any complaints?

Although the trustees of the fund and your employer are required to settle matters of interpretation of the formal documents, it could happen that a dispute arises.

Should this be the case, first you can submit your complaint in writing to the board of trustees.

The fund would be required to address your complaint within thirty (30) working days after receiving it.

If you feel that the dispute is not settled to your satisfaction, you have the right to refer the matter to the Pension Funds Adjudicator (PFA) in writing within thirty (30) days after you submitted the complaint to the fund. The procedure that must be complied with to lodge a complaint is set out in the Act. More specific information is available on the PFA website as listed below.

If you are not happy with the determination handed down by the PFA, you may, within a six (6) week period after the date of the determination apply to a division of the High Court with jurisdiction to hear your appeal about the PFA determination.. Again the procedure for such an appeal is set out in the Act.

Pension Funds Adjudicator:


Physical Address:  Riverwalk Office Park, 41 Matroosberg Road, Ashlea Gardens, Extension 6, Pretoria, 0181, South Africa
Postal Address:  P. O. Box 580, Menlyn, Pretoria, 0063, South Africa
Telephone Number:  012 346 1738
Fax:  086 693 7472
E-Mail:  enquiries-jhb@pfa.org.za
Website:  www.pfa.org.za

Financial Services Board:


Physical Address:  Riverwalk Office Park, Block B, 41 Matroosberg Road, Ashlea Gardens, Extension 6, Pretoria, 0181, South Africa
Postal Address:  P O Box 35655, Menlo Park, Pretoria, 0081, South Africa
Telephone Number:  012 428 8000 or 0800 110 443
Fax:  012 346 6941
E-Mail:  info@fsb.co.za
Website:  www.fsb.co.za

Ombudsman for Long-term Insurance:


Physical Address:  3rd Floor, Sunclare Building, Dreyer Street, Claremont, 7700, Cape Town
Postal Address:  Private Bag X 45 Claremont, 7735, South Africa
Telephone Number:  021 657 5000 or 086 103 236
Fax:  021 674 0951
E-Mail:  info@ombud.co.za
Website:  www.ombud.co.za