Sanlam now offers one retirement umbrella fund for life
The Sanlam Umbrella Fund has become the first major commercial umbrella fund in South Africa to allow members to stay in the fund into retirement, removing the need to exit the fund and purchase a living annuity. The fund’s new In-Fund Living Annuity offers members access to a range of institutionally-priced investment portfolios within its trustee-approved investment menu.
David Gluckman, head of special projects at Sanlam Employee Benefits, says the benefit is consistent with the direction of the industry proposed by National Treasury. “The world of retirement is currently going through an intense period of change aimed at giving South Africans a better outcome in retirement. The changes to our fund have been designed to support the principles of these retirement industry changes.”
He said the fund amendments were a first in the industry. “Our aim is to provide a simple pre- to post- retirement path by offering a living annuity without the need to exit the fund and purchase a new product. All our In-Fund Living Annuity and In-Fund Preservation Members benefit from internationally competitive administration fees, with only the first R1.5m assets attracting a fee of 0.10% per annum exclusive of VAT, with zero fees applying above this amount.”
He said that excessive drawdown rates (i.e. taking an unsustainably high percentage of one’s retirement capital as a monthly pension)were often one of the main criticisms of living annuities, so the fund had elected to only allow drawdown rates of between 2.5% and 7.5%. “Although current South African Income Tax legislation provides for drawdown rates between 2.5% and 17.5% the trustees believe that a cap of 7.5% is necessary to ensure sustainable pensions. This is a protection strategy that helps ensure that pensioners do not outlive their money, especially in these days with increased life expectancy. The fund also offers extremely competitive administration and institutionally priced asset management fees.”
Members can review their investment choices at any time and no investment switch fees are applicable. “We believe the comfort of being able to keep the identical investment strategy pre and post retirement will be of significant benefit and comfort to our retiring members”.
In-Fund Living annuitants can elect to transfer their entire member share at any time to another compulsory annuity offered by other registered providers of such products (including purchasing a guaranteed pension from an insurance company). “The trustees will also monitor the sustainability of pensions, and provide guidance and support to assist In-Fund Living annuitants to periodically consider the available alternatives.”
The fund also makes it easy for members to preserve during their working years, as they don’t have to go through the hassle of transferring their member share to a preservation fund or to their new employer’s fund, and can simply continue with existing investment strategies.
“In-Fund Preservation members also benefit from low administration fees and continue to enjoy institutionally priced asset management fees, as was the case when they were active members of the Fund. And, of course, all the options that are normally available to members of preservation funds are also available to these members,” concludes Gluckman.
Comments
About a week ago I followed up on my Umbrella Pension Fund that was submitted more then a month ago for payout. I was notified 25/04/2017 by Dineo Thage and I quote " Please note that the process might take a while as the company has liquidated.
We have to wait for approval from the Financial Services Board before claims can be paid. Kindly note that the process can take up to a year." I have replied on her email the following "I was retrenched end of February 2017, there was no discussions made on my Employers behalf to Liquidate the company. They were cutting costs as company was no longer making money. Please read below:
"When the company is liquidated, the provident fund will be closed and members will be paid out - they can choose to receive cash (net of tax) or they can preserve tax-free in a preservation fund, or they can transfer tax-free to their new employer's provident fund. Note that your employers assets and liabilities are separate from the provident fund, and the company's creditors cannot access your retirement savings.
Meaning my pension money has absolute nothing to do with the fact that the company is/are liquidated. You can go and check how much Employees from the company did receive their pay outs in February and know the process can't go on?
I urgently need a response" to date no answer has been given. So I do not understand what is the hold up.
My details as follows:
Member number - 35713170
Fund number - 1701785
I hope to have some assistance in this Urgent regard Report Abuse