SANLAM STAFF UMBRELLA PROVIDENT AND PENSION FUND AND RELATED - - PowerPoint PPT Presentation

SANLAM STAFF UMBRELLA PROVIDENT AND PENSION FUND AND RELATED GROUP INSURANCE

agenda

PART A - Pension and Provident Fund PART B - Group Life PART C - Critical Illness Insurance PART D - IncomeCare PART E - Family Cover PART F - Summary

INVESTMENT INCOME

RETIREMENT DEATH WITHDRAWAL

COST FOR DEATH BENEFIT MEMBERS

CONTRIBUTIONS

INVESTMENT PORTFOLIOS

Part A: Operation of the Funds

EMPLOYER

Provident Fund And Pension Fund

Provident Fund Pension Fund Employer contributions Member contributions 27½ % tax deductible Retirement Benefits Cash Death Benefits Lump sum plus fund value Fund value

Contribution Rates (% x TGP)

⧁ Pension Fund = Member contribution: Default: 7.5% ⧁ May opt for a lower level: 4%; 4.5%; 5%; 5.5%; 6%; 6.5% or 7% ⧁ Minimum = 4% ⧁ Maximum = 7.5% ⧁ Provident Fund: Employer contribution: Default : 10% ⧁ May opt for a lower or higher level: 6%; 6.5%; 7%; 7.5%; 8%; 8.5%; 9%; 9.5%; 10%; 10.5%; 11%; 11.5%; 12%; 12.5%; 13%; 13.5%; 14%; 14.5%; 15%; 15.5%; 16%; 16.5%; 17%; 17.5%; 18%; 18.5%; 19%; 19.5% or 20% ⧁ Minimum = 6% ⧁ Maximum = 20%

Investments

⧁ Individual investment choice ⧁ Default = Lifestage option ⧁ If lifestage option selected – no other portfolios may be chosen

Fixed Contribution Funds

+

VARIABLE

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Member Pension Fund Employer Provident Fund

FIXED

Contributions + Investment return = BENEFITS

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Death Benefits

⧁ Lump sum insured cover (Provident Fund) ⧁ Plus ⧁ Full Fund value (Pension and Provident Fund)

Death Benefits ― (Continue)

CONDITIONS FOR LUMP SUM INSURED COVER

⧁ Qualify for Default / Maximum: 3x TGP ⧁ Can select lower level: Minimum: 0.5x TGP Future increases/decreases ⧁ Increase within 3 months of marriage or birth/adoption of child:

• For members younger than 50 years: 1x TGP without proof of good

health

• For members 50 years and older: Any increase subject to proof of good

health ⧁ Annually during flex event:

• Increases subject to proof of good health
• Decreases (subject to minimum: 0.5x TGP)

Death Benefits ― (Continue)

AGE BAND RATE PER R1 000 COVER

< 25 years R0.185 26 – 30 years R0.138 31 – 35 years R0.144 36 – 40 years R0.161 41 – 45 years R0.168 46 – 55 years R0.193 > 56 years R0.241

COST OF LUMP SUM INSURED COVER

FORMULA FOR CALCULATING SAVING/EXTRA COST

Amount by which benefit is decreased/increased x Rate = Saving / extra cost 1 000

⧁ Saving = more saving for retirement benefits ⧁ Extra cost = less saving for retirement benefits Combined proof free limit (Fund and Group Life) R15 million

Death Benefits ― (Continue)

Part B: Group Life Assurance

DEATH COVER ON OWN LIFE

⧁ Default: 1x TGP ⧁ Minimum: 0.5x TGP ⧁ Maximum: 3x TGP ⧁ Cost: 24.4c per month, per R1 000 cover Future increases/decreases ⧁ At appointment

• Cover can be increased with proof of good health – Maximum: 3x TGP

⧁ Annually during flex event

• Cover can be decreased – Minimum: 0.5x TGP
• Cover can be increased with proof of good health - Maximum: 3x TGP

Death Cover – On Spouse’s Life

On Spouse’s Life (optional) : 0, 0.5 or 1x TGP Proof free limit: R1.4 million Cost: 23.6c per month, per R1 000 cover Options to take out cover at ⧁ Permanent appointment (without proof of good health) ⧁ Within three months of marriage (without proof of good health) ⧁ Registration of a de facto spouse (with proof of good health) ⧁ Annually during flex event (with proof of good health) Option to reduce cover ⧁ Annually during flex event

Disability Cover

• Lump sum disability cover:
• Equal to Group Life Death cover of 1x TGP; plus
• 50% of Group Life Death cover in excess of 1x TGP
• Example:

If life cover = 2x TGP Disability cover = 1.5x TGP

• Payable after a waiting period of six months
• Definition of disability is total and permanent

disability for own or similar occupation.

Option To Continue With Life Cover At Retirement / Retrenchment

CONDITIONS

• Retrenchment after 15 years uninterrupted service with the

employer.

• For five years but not after the age of 65 years.
• Amount = 5% of cover at termination of service for

each completed year of service (Maximum: 100%)

Conversion Option

• At termination of membership life cover of member and spouse

may be converted to individual life assurance with Sanlam without having to prove good health.

• Amount = 5% of cover at termination of service for each

completed year of service (Maximum: 100%)

Part C – Critical Illness Insurance

MEMBERSHIP COMPULSORY Cover = 0.5 or 1x TGP Maximum cover = R1.5 million Industry limit = R7.5 million Payable if employee is diagnosed with a critical illness Standard Comprehensive Number of illnesses 10 24 Claims Once only No limit on number of claims, but only one per illness Rate R0.28 per R1 000 R0.373 per R1 000

Part D – Incomecare

DISABILITY INCOME BENEFIT ⧁ Three month waiting period ⧁ Definition of disability: Total disability for suitable occupation BASIC BENEFIT ⧁ 75% of the first R120 000 of the annual TGP; plus ⧁ 60% of the next R360 000 of annual TGP; plus ⧁ 50% of the annual TGP in excess of R480 000; plus ⧁ 6% of TGP member contribution to Pension Fund; plus ⧁ 8.56% of TGP employer contribution to Provident Fund. TOP-UP BENEFIT ⧁ Permanent disabilities which member is unlikely to recover

• 25% of TGP – 6% of TGP (Maximum: R67 000)

Disability Income Benefit (Continue)

⧁ Retirement benefits continue until death or attainment

• f retirement date, whichever occurs first

⧁ Increase is determined annually ⧁ Minimum increase: 2% ⧁ Cost: 0.885% of TGP (after tax deduction)

Part E – Family Cover

Benefits payable at death and premiums Option 1 (Standard Cover) Option 2 (Increased cover) Additional parent cover Family member on whom benefit is applicable ⧁ Basic benefit

• Principal member
• Qualifying Spouse
• Qualifying child aged 14 and over
• Qualifying child aged 6 and over

but younger than 14

• Qualifying child younger than age 6

and/or still-born child R29 000 R29 000 R29 000 R15 950 R10 000 R58 000 R58 000 R58 000 R31 900 R20 000

• ⧁ Additional spouses (ex-spouse in

case of divorce) ⧁ Legal Parents or parents-in-law R29 000 R 7 500 R58 000 R15 000

• R10 000

Monthly premiums

⧁ Basic benefit ⧁ Additional spouse ⧁ Parent cover R 8.75 R 4.00 per spouse R22.50 per parent R17.50 R 8.00 per spouse R45.00 per parent

• R40.00 per parent

Membership

⧁ Parents and additional spouses : Optional ⧁ All employees have once-off option to join at permanent appointment ⧁ Membership ceases at:

• Resignation
• Retirement
• Dissolution of the scheme

conclusion

Contributions And Benefits Of Funds And Related Insurance

Pension Fund Provident Fund Group Life Trauma Disability Family Cover Member Spouse

Contribution/ Costs 4% - 7.5% 6% - 20% 24.4c / R1 000 (after tax) 23.6c / R1 000 (after tax) 28c / 37.3c R1 000 (after tax) 0.885% x TGP (after tax) R8.75 – Basic R22.50 per parent R40.00 for additional parent cover R4.00 – Additional spouse (after tax) Death benefits Fund value Fund value; plus assured benefit of maximum: 3x TGP Maximum: 3x TGP (tax free) 0, 0.5 or 1x TGP (tax free)

• Disabled

employees 3 months income to estates Sliding scale (tax free) Disability benefits

• Lump sum:

Equal to death benefit (tax free)

• Income benefit

Basic: 75% sliding scale x TGP and where applicable Top-up:25% x TGP

Contributions And Benefits Of Funds And Insurance (Continue)

Pension Fund Provident Fund Group Life Trauma Disability Family Cover Member Spouse

Trauma benefits

• 0.5, 1 x TGP

Maximum: R1.5 million (tax free)

• Resignation/

Retrenchment/ Retirement benefits Fund value Fund value Conversion

• ption for

death cover Conversion option for death cover

(Continuation-if qualify) Conversion

• ption

Conversion

• ption

Conversion

• ption

Sanlam Sky

Death Benefits – Nomination Forms

⧁ Very important – Benefits do not form part of estate ⧁ Always better to complete a nomination form, available on the intranet ⧁ Used as a guideline by the trustees ⧁ Trustees may override nomination (i.e. not the same as the nominee of a policy) ⧁ Three nomination forms:

• Sanlam Staff Umbrella Pension Fund and Provident Fund
• Group Life Scheme : Own life
• Group Life Scheme : Spouse

questions

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