Old Mutual SuperFund to boost retirement savings in SA
In response to the growing need for simple, cost effective and strictly governed retirement solutions, Old Mutual has launched Old Mutual SuperFund, the largest multi-employer or umbrella funds in South Africa with over 300 000 member accounts from more than 5 000 employers.
According to Hugh Hacking (Umbrella Fund Product Manager, Old Mutual Corporate), the aim of the fund is to provide a simple, affordable and reliable way for employees to save for their retirement.
In a recent study conducted by Old Mutual (Old Mutual Retirement Monitor 2010), 50% of employees who are not members of retirement funds said they would definitely join if it was offered by their employer. To further encourage employers in this regard, Hacking says that the Old Mutual offering has been designed to offer retirement solutions suited to every business.
Old Mutual SuperFund has incorporated Old Mutual’s market-leading Orion and Evergreen umbrella fund products, which provide flexible solutions for small to medium and medium to large size businesses respectively.
Aiming at businesses that currently don’t offer retirement benefits to staff, Old Mutual has also introduced Easy Benefit Plan, a simple retirement fund solution for companies wanting maximum simplicity and cost effectiveness.
The Easy Benefit Plan offers employee benefits such as life and disability cover, family funeral cover as well as a retirement savings vehicle without any medical underwriting. “We have tried to make it as easy to purchase, activate and administer as possible, with businesses also receiving ongoing support as well as free access to advice from an employment law web-based service,” says Hacking.
To be eligible for the Easy Benefit Plan, the business must employ five or more staff and have access to the Internet. In order to activate the package, the business will also require an accredited payroll system installed or Microsoft Excel.
Finally, the Old Mutual SuperFund range also offers the established Protektor Preservation Funds – an easy to use, low cost solution, designed to help employees preserve their retirement savings. To promote people preserving their retirement savings, Old Mutual will not charge initial administration fees for existing Old Mutual clients transferring into Protektor.
Hacking says that peace of mind for members is of paramount importance and therefore Old Mutual has set up SuperFund to be managed according to the highest standards of good governance, with a board of highly qualified and skilled Trustees that are making sure that employers can focus on their core business while their employees can feel secure, knowing their money is in safe hands.
These funds use their size and efficiencies of scale to operate at the lowest possible cost. “These savings are passed on to employers in the form of lower fees, which means employees get more out when they leave the Fund. There are no hidden costs and you only pay for what you use.”
Hacking confirms that there has already been considerable growth in umbrella funds in recent years as employers seek to shed trusteeship responsibility in an increasingly legislated industry, while also attempting to reduce costs.
In a recent industry study (Old Mutual Retirement Funds Survey 2010) conducted by old Mutual, 53% of those surveyed believed that umbrella funds will continue to grow strongly. 97% of respondents who were part of an Umbrella funds felt their expectations were being met.
“The appeal of umbrella funds for employers lies primarily in the fact that they offer the ability to transfer the responsibilities of fund administration and trusteeship away from the employer. These funds also embed the expertise of providers, and can offer better value, lower cost and better benefits than comparable stand-alone funds.”
