ASISA: Fundisa education fund declares bonus of R5.5 million in 2016

The Fundisa education unit trust fund boosted the higher-education savings of more than 27 000 beneficiaries from lower-income families in 2016 with a bonus payment of R5.5 million.

Fundisa is a public/private partnership between the Department of Higher Education and Training, the National Student Financial Aid Scheme (NSFAS) and the Association for Savings and Investment South Africa (ASISA). Launched in 2007, the initiative aims to incentivise South Africans to save for the tertiary education of learners from lower-income families.

 Trevor Chandler, Consulting Senior Policy Adviser at ASISA, explains that investments in the fund are enhanced by 25% each year up to a maximum of R600 per beneficiary. 

He notes that despite the difficult economic conditions that marked 2016, the bonus allocation grew from R5.4 million in 2015 to R5.5 million in 2016. 

“In recent years we have seen the bonus allocation decrease as a result of investments being withdrawn for purposes other than education, in which case the bonus payment is forfeited,” he says. 

“It is therefore encouraging to see that a growing number of investors in 2016 remained committed to saving for children’s higher education despite facing other financial pressures.” 

He states that the fund saw a positive growth in assets under management from R214.5 million in 2015 to R255.1 million at the end of December 2016. The number of investors saving on behalf of 27 213 beneficiaries increased to 22 382 in 2016. 

The fund applies a means test of an annual household income of R180 000 or less to the families of beneficiaries, ensuring that Fundisa only supports the needs of children from lower-income families. As this test applies only to the families of beneficiaries and not investors, high-income earners are able to invest on behalf of children from lower-income families. 

The following bonus payments have been distributed since the launch of Fundisa: 

How the Fundisa Fund works 

The Fundisa Fund is a low-risk interest-bearing unit trust fund of funds administered by STANLIB. The underlying portfolios, which invest in bonds, fixed deposits and other interest earning securities, are managed by selected asset managers.

Bonus payments are not guaranteed, but Chandler explains that as long as there are enough funds, the bonus will be allocated annually to beneficiaries that pass the fund’s means test. Bonus contributions are funded by the Government and ASISA members. 

The Fund is open to investors wanting to save for the higher education at a public institution of a South African citizen or permanent resident who comes from a household earning R180 000 or less a year. A minimum investment of R40 is required. The investor can then choose to pay R40 or more every month or top up the investment when money becomes available. 

An annual fee of no more than 1.25% (excl VAT) applies, which is taken from the return earned on the money invested. Companies offering the Fundisa fund can discount this fee. A maximum initial fee of 3% (excl VAT) may be charged, but only if the investment is made with the help of an independent financial adviser. Fundisa is available from Standard Bank, Nedgroup Investments and ABSA. 

More information is available from the Fundisa website at www.fundisa.org.za.