Sanlam - annual report to members for the period 1 april 2014 ......• Glacier • Sanlam Sky...

staff umbrella pension and providend funds (SSUF)

annual report to members for the period 1 april 2014 to 1 march 2015

contentIntroduction pg 1

Board of Trustees pg 2

Development and changes in the fund for the period 1 April 2014 to 31 March 2015 pg 5

– Rule changes pg 6

– Investments pg 7

– Rates for death, trauma and death disability benefits pg 15

How tax rules affect you pg 21

Tips on how to save smartly for retirement pg 25

SSUF - your financial safety net in case of death and disability pg 29

Why should you nominate beneficiaries pg 31

Web access to fund benefits pg 33

Options in case of promotion, marriage, death of a spouse, birth/adoption pg 34of a child and divorce

Fund information and other queries pg 35

Summary of contributions and benefits pg 36

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It is important that you make sufficient provision in your financial planning for:• your retirement; • your potential disablement; and• should you die.

Introduction

The SSUF and the related group life insurance benefits play a very important role in your financial planning.

Please make sure that you know what benefits you enjoy and put a proper financial plan in place with the assistance of an accredited financial adviser.

In this report we provide important information/tips on how you can save for retirement and how the SSUF functions as a financial safety net in case of death or disability.

We encourage you to visit the communication website of the SSUF for more comprehensive information and articles to assist you with your financial planning.

The website address is: http://www.sanlam.co.za/campaigns/myretirementfund/Pages/default.aspx

The Board of Trustees that manages the SSUF comprises of ten trustees.

Five of the trustees are elected by members of the SSUF and five trustees are appointed by the principal employer after consultation with the different participating employers.

In order to ensure a fair representation of all the participating employers the five member representatives are elected as follows:

Two from Sanlam Personal Finance (SPF) (including Sanlam Sky);

One from Sanlam Investments (SI);

One from Santam; and

One from the remaining businesses that include the Sanlam Group Office, Sanlam Employee Benefits (SEB) and Sanlam Emerging Markets (SEM)

boardof trustees

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The current member elected trustees are:

Business Unit Trustee Alternate Term of service

Santam Maryke Kotze André Lotz 1 March 2014 – 28 February 2017

SPF Jannie van Zyl Stefan du Preez 1 July 2015 – 30 June 2018

SPF Johann de Wet Arthur Zerf 1 July 2015 – 30 June 2018

SI Hendrik Scholtz Rajesh Sukha 1 July 2015 – 30 June 2018

Other/SEB David Gluckman PG Marais 1 July 2015 – 30 June 2018

The employer appointed trustees are primarily individuals with the applicable technical skills and experience in fund related matters, i.e. actuarial, risk, finance, investments, governance, legal and human resources.

The current employer appointed trustees are:

Area of expertise Trustee Alternate Term of service

Finance/Investments/Legal Lizet Murray Joseph Makgopa 1 March 2014 – 28 February 2017

Actuarial/Investments/Risk Werner Barnard Clifton J van Rensburg 1 July 2015 – 30 June 2018

Investments/Finance Haydn Franckeiss Jill Rose 1 July 2015 – 30 June 2018

Governance/Investments/Finance ML Carstens Ahmed Banderker 1 July 2015 – 30 June 2018

HR/Legal/Governance Vionne Tregurtha Robert Goff 1 July 2015 – 30 June 2018

The participating employers in the SSUF are:

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Other Fund OfficialsPrincipal OfficerChrisna SwartTel: 021 947 8404 Email: [email protected]

Deputy Principal OfficerDiana PetersenTel: 021 947 4853Email: [email protected]

Sanlam Investments

• Sanlam Life Insurance Ltd

• Blue Ink

• Sanlam Capital Markets

• Sanlam Collective Investments

• Sanlam Employee Benefits

• Sanlam Investment Management

• Sanlam Multi Managers

• Sanlam Private Investments

• Infinit

Sanlam Personal Finance

• Sanlam Health

• Sanlam Trust

• Sanlam Personal loans

• Glacier

• Sanlam Sky Solutions – including Safrican

Short-term insurance cluster

• Santam

• Mi-Way

• Mirabilis

• Emerald

• Hospitality & Leisure Underwriters

The SSUF is an umbrella fund for employers within the Sanlam Group

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development and changes in the fundfor the period 1 april 2014 to 31 march 2015

Member statistics 1 April 2014 1 April 2015

Active members 10 189 10 387

Occupationally disabled members 82 95

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rule changesThe following rule changes were registered during the year under review.

• The definition of Transfer Credit was simplified.

• Provision was made for members of the Sanlam-Pensioenfonds (Kantoorpersoneel), who became members of the SSUF on 1 April 2014, to retain their normal retirement date.

• Provision was made for the employees of Travel Insurance Consultants and Safrican who were transferred to the SSUF.

• The definition of a preservation fund was amended in accordance with latest legislation changes.

• A definition for an unclaimed benefit fund was included.

• The definition of unclaimed benefits was amended to include death benefits and benefits payable to a former spouse of a member.

• The trustees may delegate duties and power in terms of the Rules and in accordance with the Financial Services Law General Amendment Act, 2013.

• Provision for the appointment of a deputy Principal Officer.

The above changes were registered to the Rules of both the Pension and Provident Fund.

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investmentsDistribution of members’ fund values in the various investment portfolios

Investment portfolios 31 / 03 / 2014 31 / 03 / 2015 30 / 06 / 2015

Cash 1.43 % 1.03 % 2.65 %

Monthly Bonus 1.52 % 1.50 % 1.48 %

Stable Bonus 9.74 % 9.65 % 9.62 %

Absolute Return 2.11 % 1.96 % 2.09 %

SIM Moderate 6.13 % 5.77 % 5.96 %

Sanlam NUR Balanced 0.43 % 0.41 % 0.43 %

Allan Gray Domestic Balanced 20.04 % 17.88 % -

Allan Gray Global Balanced - - 17.60 %

Coronation Managed 13.66 % 12.77 % 13.24 %

SIM Aggressive 5.14 % 5.25 % 5.47 %

Glacier Option 31.29 % 33.19 % 33.79 %

Life Stage Programme Portfolios- Accumulation- Consolidation A (Investment linked)- Consolidation B (Investment linked)- Preservation (Investment linked)- Consolidation A (Insured Product)- Consolidation B (Insured Product)- Preservation (Insured Product)

7.05 %0.14 %0.62 %0.11 %

0.26 %0.25 %0.08 %

8.90 % 0.18 %

0.56 % 0.18 % 0.19 % 0.41 % 0.17 %

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Sanlam Life Stage Option- Accumulator Portfolio- Capital Protection Portfolio- ILLA Preservation Portfolio

6.97 %0.63 %0.07 %

Total 100.0 % 100.0 % 100.0 %

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The Board of Trustees of the Sanlam Staff Umbrella Pension and Provident Funds (SSUF) continuously monitor and review the investment menu to ensure that it is optimal for the members. In light of the above, decisions have to be made from time to time to effect changes to the investment menu of the SSUF.

With effect from 1 June 2015, the Allan Gray Domestic Balanced Portfolio was replaced with the Allan Gray Global Balanced Portfolio and the Lifestage Programme with the Sanlam Lifestage Model.

changes to Investment portfolios as from 1 june 2015

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Why these changes?Allan Gray

The Allan Gray Domestic Balanced Portfolio and Global Balanced Portfolio have similar risk / return profiles. The major difference is that the Global Balanced Portfolio provides diversification as it is allowed to have exposure to foreign assets, whereas the Domestic Balanced Portfolio is restricted to local assets.

The Allan Gray Global Balanced Portfolio has also shown more consistent outperformance of its benchmark with lower volatility than the Allan Gray Domestic Balanced Portfolio over the longer term.

Lifestage

Although the former Lifestage Programme and the Sanlam Lifestage Model follow a lifestage investment philosophy, the Sanlam Lifestage Model includes enhancements which make it more appropriate as a default investment portfolio for the SSUF going forward.

The Sanlam Lifestage has the following enhancements:

• The structure of the Accumulation Portfolio of the Sanlam Lifestage allows for greater asset allocation flexibility which aims to provide market-related capital growth. In essence it will allow for higher exposure to both offshore equities and bonds.

• The design of the Sanlam Lifestage allows for a smooth de-risking process from the Accumulation Portfolio (growth-focused portfolio) to the Preservation Portfolios (more conservative portfolios) by switching your fund value in 50 monthly switches starting when you are 6 years from retirement through to approximately 2 years before you retire.

• The design of the Sanlam Lifestage offers you a choice of three different preservation portfolios to better match your fund value to your post-retirement annuity choice when you reach 6 years before your retirement. The Sanlam Lifestage Preservation Portfolios targets the following annuities:

Preservation Portfolio Targeted Annuity

Capital Protection a Guaranteed Annuity

ILLA a Living Annuity

Inflation Linked an Inflation Linked Annuity

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Below is a graphic illustration of the functionality and design of the Sanlam Lifestage

Accumulation Phase

Accumulation Phase

SystematicAutomated

Monthly Transition(More than 72 months from Normal Retirement Age / Planned Retirement Age)

(72 months and less, but more than 23 months from Normal Retirement Age / Planned Retirement Age)

(23 months and less from Normal Retirement Age / Planned Retirement Age)

Sanlam Lifestage Capital Protection Preservation Portfolio

Sanlam Lifestage Inflation-linked Preservation Portfolio

Sanlam Lifestage Living Annuity (ILLA) Preservation Portfolio

Sanlam Lifestage Accumulation Portfolio

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Return (net of fees and tax) over the period stated below, ended on 1 April 2015

PeriodSIM

ModeratePortfolio

SIMAggresivePortfolio

Allan Gray CoronationSanlam

AbsoluteReturn

Stable Bonus

MonthlyBonus

CashPortfolio

SanlamNUR

Balanced

Life StageAccumu-

lator

3 months Over the period 6.34 % 5.24 % 3.45 % 3.42 % 3.81 % 3.06 % 2.88 % 1.61 % -1.12 % 6.48 %



12 months Over the period 17.42 % 14.16 % 10.75 % 11.41 % 11.33 % 14.61 % 15.20 % 6.43 % 3.17 % 16.01 %

24 months Annualised 18.21 % 17.90 % 12.25 % 16.91 % 12.68 % 17.41 % 15.93 % 5.98 % N/A 18.82 %


Since inception

Over the period 777.15 % 524.61 % 839.86 % 681.66 % 249.22 % 389.94 % 311.74 % 322.88 % 8.04 % 91.38 %

Since inception Annualised 12.81 % 13.72 % 18.30 % 16.67 % 11.85 % 14.16 % 12.52 % 8.34 % 6.38 % 18.02 %

Inception date01/04/1997 01/01/2001 01/12/2001 01/12/2001 01/02/2004 01/04/2003 01/04/2003 01/04/1997 01/01/2014 01/05/2011

The investment performances of the funds’ various investment portfolios as at 1 April 2015Sanlam Staff Umbrella Pension Fund

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Period

Life StageConsolida-

tor A(Guaranteed

Annuity)


tor A(Investment

Linked)


tor B(Guaranteed

Annuity)


tor B(Investment

Linked)

Life StagePreserver(Guaranteed

Annuity)

Life StagePreserver(Investment

Linked)

3 months Over the period 5.55 % 6.19 % 4.39 % 4.93 % 3.28 % 3.90 %




24 months Annualised 16.54 % 17.65 % 11.74 % 13.89 % 10.52 % 12.13 %


Since inception

Over the period 74.07 % 85.08 % 55.03 % 67.40 % 51.16 % 58.61 %

Since inception Annualised 15.20 % 17.02 % 11.85 % 14.06 % 11.13 % 12.50 %

Inception date01/05/2011 01/05/2011 01/05/2011 01/05/2011 01/05/2011 01/05/2011

The investment performances of the funds’ various investment portfoliosSanlam Staff Umbrella Pension Fund

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Period

SIMModeratePortfolio

(Old Focus 1)

SIMAggresivePortfolio

(Old Focus 2)

Allan Gray CoronationSanlam

AbsoluteReturn

Stable Bonus

MonthlyBonus

CashPortfolio

SanlamNUR

Balanced

Life StageAccumu-

lator




12 months Over the period 17.47 % 14.26 % 10.86 % 11.46 % 11.35 % 14.62 % 15.23 % 6.43 % 3.23 % 16.23 %



Since inception

Over the period 776.18 % 524.87 % 843.52 % 678.96 % 250.40 % 389.84 % 311.99 % 323.01 % 8.11 % 91.89 %

Since inception Annualised 12.81 % 13.72 % 18.33 % 16.64 % 11.88 % 14.16% 12.52% 8.34 % 6.43 % 18.11 %

Inception date01/04/1997 01/01/2001 01/12/2001 01/12/2001 01/02/2004 01/04/2003 01/04/2003 01/04/1997 01/01/2014 01/05/2011

Sanlam Staff Umbrella Provident FundThe investment performances of the funds’ various investment portfolios

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Period


tor A(Guaranteed

Annuity)


tor A(Investment

Linked)


tor B(Guaranteed

Annuity)

Life StageConsoli-

dator(Investment

Linked)

Life StagePreserver(Guaranteed

Annuity)

Life StagePreserver(Investment

Linked)







Since inception

Over the period 72.62 % 83.59 % 55.74 % 67.13 % 51.03 % 59.94 %

Since inception Annualised 14.96 % 16.78 % 11.97 % 14.01 % 11.10 % 12.74 %

Inception date01/05/2011 01/05/2011 01/05/2011 01/05/2011 01/05/2011 01/05/2011

Sanlam Staff Umbrella Provident Fund

please note:1. The returns above are net of investment

manager fees and retirement fund tax. Retirement fund tax has been abolished since 1 March 2007.

2. Published rates are time weighted to remove the effect of cash flows and are gross of investment manager fees and retirement fund tax and may therefore differ from returns reflected in this report.

3. There is currently a two day time lag on member records shown on the administrator’s website and the actual position at the fund manager. This means that the investment data for each portfolio, reported on 31 July 2014 (for example) is actually the investment data as at 29 July 2014.

4. This report summarises returns for the funds’ total portfolios. Returns for a particular member may differ depending on actual cash flow, investment options and accumulated credits.

The investment performances of the funds’ various investment portfolios

The premium rates for death, trauma and disability benefits offered to Sanlam’s office staff by the funds and group insurance are reviewed annually by the insurer.

If necessary, the premium rates will be adjusted depending on the claims experience.

Please see next pages for the full details of the monthly premium rates that came into effect on 1 April 2015.

rates fordeath, trauma and disability benefits

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Age band Default cover Multiple of PEAR

Maximum coverMultiple of PEAR

Rate per R1 000 cover before 1 April 2015

Rate per R1 000 cover as from 1 April 2015

Younger than 26 years 5 11 R0.167 R0.159

26 – 30 years 7 13 R0.119 R0.113

31 – 35 years 7 12 R0.119 R0.113

36 – 40 years 6 10 R0.139 R0.132

41 – 45 years 6 8 R0.139 R0.132

46 – 50 years 5 7 R0.167 R0.159

51 – 55 years 5 6 R0.167 R0.159

56 years and older 4 6 R0.208 R0.198

Sanlam Staff Umbrella Provident Fund01

The average rate in respect of death cover has decreased from 1.00 % to 0.95% of pensionable remuneration (PEAR).

The premiums of members who selected a lower level of cover reduced according to the rate applicable to their age band. (See table below) The annual flex exercise affords members with an opportunity to select a lower level of cover.

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04 trauma insuranceThe rate for the trauma insurance has decreased from R0.286 to R0.257 per month per R1 000 cover.

income care insurance 02 The rate of the income disability cover has decreased from 1.017 % to 0.885 % of total guaranteed package (TGP).

As from 1 March 2015 the premium is an after tax deduction, but the benefit payable will no longer be taxable.

The benefit scale was adjusted as follows:

Cover on the member's life

The rate for group life insurance (lump sum disability and death benefits) has decreased from R0.264 to R0.245 per month per R1 000 cover.The minimum level of cover in respect of members, appointed before 1 May 2011 and who enjoy limited cover due to the results of their medical assessment, was adjusted to the lesser of:the member’s elected level of cover (multiple of pensionable remuneration); or R450 000 (previously R230 000).

group life insurance 03

Cover on the spouse's life

The rate for spouse’s group life insurance remained unchanged at R0.236 per month per R1 000 cover.

Benefit before 1 March 2015

Tax free benefit as from 1 March 2015

• 75 % of annual TGP • 75 % of the first R120 000 of annual TGP, plus• 60 % of the next R360 000 of annual TGP, plus• 50 % of the annual TGP in excess of R480 000

The minimum benefit applicable to certain members, who were appointed before 1 May 2011, and enjoy limited cover due to the results of their medical assessment, increased from R29 000 p.a. to R56 000 p.a.

The rate for these members is also 0.885 % of TGP. However, the maximum premium payable by them increased from R190.00 per month to R200.00 per month.

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Option 1 Option 2

InsuredBenefit before

1 April 2015Benefit payable from

1 April 2015Benefit before

1 April 2015Benefit payable from

1 April 2015

Principal member R25 000 R27 500 R50 000 R55 000

Qualifying spouse R25 000 R27 500 R50 000 R55 000

Qualifying children of 14 years and older

R25 000 R27 500 R50 000 R55 000

Qualifying children of 6 years and older, but younger than 14 years

R13 750 R15 125 R27 500 R30 000

Qualifying children younger than 6 years, or a stillborn child R 9 125 R10 000 R10 000 R10 000

Parents (who are insured) R 5 500 R 7 500 R11 000 R15 000

family cover05 The premiums of the family insurance remained unchanged. The level of death benefits payable was increased as follows:

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Option 1 Option 2

Premium for principal member, spouse and children

R 8.75 per month

R17.50 per month

Premium for parentsR22.50 per parent per month

R45.00 per parent per month

Premium for additional spouse

R 4.00 per spouse per month

R 8.00 per spouse per month

The premiums for family cover are:

important to note All existing employees who do not have family cover can no longer apply to participate in this insurance as they

previously had a once-off option to take out family insurance and to insure their parents. Only those members who have the basic family cover can add parents-in-law within 3 months of marriage. (The addition of parents is not allowed for current members.) New employees get a once-off option at appointment.

The death and disability benefits of members of the SSUF are subject to the following proof free limits:

Death benefits payable by the Sanlam Staff Umbrella Provident Fund and Group Life Insurance (including the lump sum disability benefit) • Combined proof free limit = R13 500 000

Death benefit on your spouse’s life (optional) • R1 200 000

Monthly income disability benefit • R110 000 pm (Including the 10.7 % employer contributions to the Provident Fund and the member contribution of 7.5 % to the Pension Fund).

Members who qualify for benefits that exceed the above amounts need to provide proof of good health for the amount that exceeds the proof free limits.

proof free limits (PFL)

please note:Recoupment of premiums and tax effect:

The cost of the Group Life Insurance, Income Care Insurance and Family Insurance are after-tax deductions from the member’s remuneration. The actual premium paid by each member for this insurance will be reflected on his/her pay slip. Because the insurance premiums are paid with after-tax money, the benefits payable, in accordance with current legislation, are tax-free.

The premiums of the death benefits provided for by the Provident Fund is recouped from the employer contribution. The actual premium recouped per member is reflected on each member’s individual benefit statement.

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how tax rules affect you from 1 march 2015

New tax legislation came into effect on 1 March 2015. Here’s how it affects you.

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1.1 Your disability income cover premiumsYour premiums for disability income cover are no longer tax-deductible.

1.2 Your remunerationThe premium for disability cover became a separate after-tax deduction, which may have resulted in a small reduction in your take-home pay.

1.3 Your benefits should you be declared disabledIf you become disabled you will receive a tax-free disability income. The structure or formula of the disability benefit is no longer a fixed percentage, i.e. 75% of TGP. It is calculated according to a sliding scale and it is at least equal to or higher than the net after-tax benefit you would have previously enjoyed on the old dispensation, which applied prior to 31 March 2015.

Income disability benefit

noteThere won’t be a reduction in the benefits of members who are already on disability. Their net income increased as their disability income is no longer taxable.

01

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1.4 Your monthly savings to the SSUFYou save more for retirement because since 1 March 2015 the employer contribution to the SSUF is no longer reduced by the premium for the disability income cover (PHI).

Fund contributions before 1 March 2015 Fund contributions as from 1 March 2015

TGP: R15 000 pm / PEAR*: R12 000

Employer contributions (17,5 %) = R2 100,00

Less PHI premium = R 152,55

Savings for retirement = R1 947,45

TGP: R15 000 pm / PEAR*: R12 000

Employer contributions (17,5 %) = R2 100,00

Less PHI premium = R 0,00

Savings for retirement = R2 100,00

* Pensionable earnings

Example

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You have to retire on the retirement date stated in the contract between you and your employer and cannot opt for late retirement.

However, the new tax legislation implemented from 1 March 2015 allows you to postpone the payment of the retirement benefits from the SSUF. On retirement you can elect to preserve your benefit in the SSUF until you want it to be paid out. The benefit will accrue for tax purposes only when it becomes payable.

The following rules apply during postponement of the payment:

• You may not make further contributions to the SSUF.

• You will not qualify for death or other risk benefits. At retirement date you have to make use of the continuation or conversion options for risk benefits. If you die during the period of postponement, the accumulated fund values are payable in accordance with the instructions of the executor of your estate, provided that not more than one third of the benefit under the Sanlam Staff Umbrella Pension Fund may be paid in a lump sum.

• The benefit will be invested in the SSUF portfolios you selected. You may make investment switches.

• You have to pay a monthly administration fee that will be recovered from your accumulated fund value.

Option to postpone the payment of your benefits after actual date of retirement

please noteYou may elect to retire early within 10 years before your normal retirement date. However, the employer’s permission is required for you to retire more than five years before your normal retirement date.

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At retirement Group Human Resources Support Services (HRSS) will communicate the detail of the procedure to postpone the payment of your retirement benefit with you.

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tips on how to save smartly for retirement

Planning for a financially secure retirement should start on day one of your first job – and the size of the pension you eventually receive will be affected by your expenses and the decisions you’ve made along the way.

these good habits can help you save for your retirement:

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1. Adopt an attitude of self-reliance and encourage your siblings, spouse and children to do the same.

• Often people feel their spouse should be responsible for providing for their retirement. Divorce statistics and more favourable taxation on retirement make sharing this burden the better option.

• Your retirement is your responsibility. Make this point clear to those close to you!

• Don’t reduce your contributions to the SSUF and think you’ll catch up later.

2. Budget carefully and don’t live beyond your means. Importantly, don’t let others, including loved ones, get you into debt.

• Understand the nature of your monthly expenses, what is compulsory, what is an optional luxury, where there’s room to manoeuvre and at what cost. This is critically important when you’re nearing retirement as you might suffer a drop in earnings at retirement and will need to reduce your expenses.

• Learn to recognise the hidden expenses.

• Getting others out of financial trouble by getting yourself into debt is unwise.

• Encourage your children to budget.

3. Start saving for the medium and long term from day one.

• 'Compound interest is the most powerful force in the universe.’ – Albert Einstein

• If you get into the habit of spending all your money each month you’ll struggle to live within your means because unexpected expenses will come along.

• Having a reserve is immensely reassuring – in an emergency situation it will help you not to make hasty decisions under pressure.

4. If the signs are there, downscale before you’re forced to do so.

• Always be realistic about your earning potential, job security, the number of years you have left to work and your accumulated savings for retirement.

• If you have a handle on your budget five years before you retire, amend the income column to reflect your anticipated income after retirement and analyse your expenses. If you will be required to cut expenses, make considered decisions timeously.

• Very few people are able to generate additional income after retirement or in a position to support others financially.

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5. Strive to lead a healthy life.• Having lower medical costs during your years of

employment will enable you to channel these savings towards retirement provision and lead a more rewarding life. Being healthy will:

• reduce your medical costs and consequently your expenses during retirement

• provide you with more options to lead a rewarding, meaningful and enjoyable lifestyle during retirement

• enable you to work beyond formal retirement in order to supplement your income and to provide you with the necessary mental stimulation.

6. Long-term savings should not be used to cover short-term debt.

• Research has shown that more than 80% of employees who change jobs cash in their pension when doing so. Preserve your retirement money for retirement! We are, on average, living longer than previous generations and your retirement savings will need to cover you for a longer period.

7. Invest appropriately.• Don’t invest too conservatively while you are young, as you

might not beat inflation over the long term.

• Understand the cost implications of your chosen investment option.

• Consult an accredited financial adviser to assist you with your investment choice.

SSUF – your financial safety net in case of death and disability

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Is there sufficient provision for your financial needs and those of your family if you become disabled or die? And will anything be paid if you are diagnosed with a traumatic illness? Yes, Sanlam has excellent insurance structures in place to provide for the financial needs of SSUF members. Here’s an overview of the available benefits.

Pension Fund Provident Fund Group Life Trauma CoverDisability

Income CoverFamily Cover

Member Member Member Spouse Member Member Member and family

Death cover for employee (member) and family members Fund value

Fund value plus assured

benefit according

to member’s choice equal

to a level between

0 and 13 x PEAR

1 or 2 x PEAR (tax-free)

According to the member’s

choice

0 or 1 x PEAR (tax-free)

If the member elected this

cover

When the member

or a family member dies,

a benefit is payable in

accordance with the

Option 1 or 2 sliding scale,

as selected by the member

(tax-free)

Trauma cover when an employee is diagnosed with a traumatic illness

1 x PEAR (tax-free)

Maximum: R1,15 million

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Pension Fund Provident Fund Group LifeTrauma Cover

Disability Income Cover

Family Cover

Member Member Member Spouse Member Member Member and family

Disability cover when an employee is declared totally and permanently

disabled

A lump sum equal to the

group life death benefit

is payable after a six-

month waiting period

(tax-free)

A tax-free income benefit is payable after a three-month

waiting periodBasic benefit:

75% x TGP (sliding scale),

plus where applicable, an

additionaltop-up: 25% x

TGP

At resignation/retrenchment/ retirement benefit of an employee Fund value

Fund value Death cover

can be converted to a personal

policy

Death cover can be converted to a personal policy (some

members can also qualify for the continuation option)

Disability cover can be

converted to a personal policy

Monthly costs/rates of cover are very affordable

A rate according

to the employee’s

age

24,5c/R1 000 cover

(after-tax premium)

23,6c/R1 000 cover

(after-tax premium)

25,7 c/R1 000 cover (after-tax premium)

0,885% x TGP (after-tax premium)

Option 1R8,75 – basic

benefit

R22,50 per parent

R4,00 – per additional

spouse (after-tax premium)

Unique benefits for each employeeWithin this structure you can exercise many choices – each employee’s benefit structure will be unique. Read your latest fund benefit statement and consult with a financial adviser to make sure you understand it.

Notes: Fund value = The member’s accumulated savings for retirement

TGP = The annual Total Guaranteed Package

PEAR = Pensionable earnings (80% of TGP)

why you should nominate beneficiaries

Have you nominated beneficiaries to receive your fund and group life benefits when you pass away? Make sure you do!

The benefits payable to your dependants and other beneficiaries after your death are a vital source of financial provision for them. So it’s crucial that members of the Sanlam Staff Umbrella Pension and Provident Funds (SSUF) and the Group Life Insurance Scheme for Sanlam Office staff (the Group Scheme) nominate beneficiaries who should receive these benefits when they die.

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Who is a dependant?

A dependant is:

• someone for whom you were legally liable for maintenance

• someone who, upon your death, is dependent on you for maintenance, including food, shelter and the costs of medical care and education

• your spouse, including in terms of a customary marriage or a religious union

• your child, including a posthumous or adopted child and a child born out of wedlock

• someone for whom you would have become legally liable for maintenance had you not died.

Nominated beneficiaries

You can nominate beneficiaries for both the SSUF and Group Scheme by completing the necessary forms. Nominations can also be done electronically via the Retirement Fund Web.

By making nominations you indicate to the trustees who you would like to receive the benefits when you die.

The trustees are not bound by your nomination, but it will be taken into consideration in the distribution of the death benefits.

Only natural persons (human beings) may be nominated in respect of benefits provided under the SSUF. For benefits provided under the Group Scheme a juristic person (not a human being) may also be nominated, as well as a trust or your estate.

Why should I make nominations?

• You know your personal circumstances best and nomination forms can be completed according to those needs.

• You can give voice to your personal wishes by indicating who you would like to receive the benefits payable.

• If you have no dependants and have not nominated anyone, your benefits will be paid into your estate. This would mean unnecessary extra costs and the beneficiaries of your estate would have to wait until your estate is finalised before they receive any payment.

• It will ensure that the trustees know about a loved one who you would like to receive part of the benefits payable should you die.

Make sure that the beneficiaries that you have indicated on your benefit statement are in line with your current circumstances and wishes. If it isn’t the case, or if no beneficiaries are indicated, you must complete new beneficiary nomination forms or change your beneficiaries via the Retirement Fund Web.

Beneficiary nomination forms completed for a previous fund, such as the Santam Retirement Fund or Sanlam Pension Fund (Office Staff), do not apply with regard to your SSUF benefits, including the benefit provided under the Group Scheme. If you were transferred to the SSUF from a previous fund, you need to complete new beneficiary nomination forms.

What about my wishes in my will?

Death benefits do not form part of a member’s estate, so benefits cannot be paid according to your will. The benefit will only be paid to your estate if you have no dependants or nominated beneficiaries or, in the case of the benefit provided under the Group Scheme, if you have nominated your estate.

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The death benefit protocol of the SSUF explains the handling of the death benefits in detail. It is available on the SSUF website at www.sanlam.co.za/campaigns/myretirementfund/Pages/default.aspx.

web access to fund benefits

The Retirement Fund Web function offers members direct access to their retirement fund information.

For a member to obtain his/her username and password, he/she must send an e-mail with his/her name and surname, pay code and identity number to: [email protected].

The guide containing step-by-step instructions on how to access the web, is available on the SSUF website at http://www.sanlam.co.za/campaigns/myretirementfund/Pages/default.aspx

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options in the case of promotion, marriage, death of a spouse, birth/adoption of a child and divorce

Members have the option of increasing their life cover, subject to certain conditions, in the case of promotion, marriage, death of a spouse, birth/adoption of a child and divorce.

The relevant options must be exercised in the prescribed format and submitted to Human Resources along with the required documents, within three (3) months of the event.

Should the required option form and supporting documents not reach Human Resources Support Office within the prescribed time period, the option will lapse and will not be implemented.

The option forms and full details are available on the SSUF website at http://www.sanlam.co.za/campaigns/myretirementfund/Pages/default.aspx

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fund information and other queries

Comprehensive fund information is available on the SSUF website at http://www.sanlam.co.za/campaigns/myretirementfund/Pages/default.aspx

Members can access their fund benefits and related information via the Retirement Fund Web facility at any stage.

The trustees urge members to visit the website on a regular basis and to ensure that they are well informed about their retirement and related benefits.

Please refer to the Web-user manual for step-by-step instructions on how to access the Web and for details about the facilities and information available.

Direct any questions and concerns to Chrisna Swart at:

E-mail: [email protected] Postal address: PO Box 1, Sanlamhof, 7532

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Sanlam staff umbrella pension and provident funds (SSUF) and related group life Insurance

Summary of contributions and benefits

important This summary is for information only. The provisions and conditions of the Funds and Group Insurance are set out in full in the official Rules and Policies.

In the event of any discrepancy the official Rules and Policies apply.

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contribution rates 01

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Pension Fund – Member contributions

Provident Fund – Employer contributions

Minimum rate 5 % of PEAR 7.5 % of PEAR

Choice to increase increments of 0.5 %. increments of 0.5 %.

Default 7.5 % 10 %

Maximum rate 7.5 % 20 %

retirement 2.1 Retirement Age (NRA)

Normal retirement age (NRA) is as contracted between the member (employee) and the employer, and may range between 60 and 65 years old.

2.2 Normal Retirement Date (NRD)• 31st December nearest to NRA in respect of all members

who were members of the funds before 1 January 2012, except for those who were transferred to SSUF in terms of Section 14 in the term 1 May 2011 to 31 December 2011.

• The end of the month in which a member reaches his/her NRA in respect of:

• those members who were transferred to SSUF in terms of Section 14 during the period 1 May 2011 to 31 December 2011;

• all members who joined the fund as from 1 January 2012; and

• Santam employees appointed after 1 March 2013.

• Santam members transferred to the SSUF on 1 March 2013 retained their normal retirement date, i.e. 1 April following the date on which they reach their normal retirement age.

02 2.3 Early RetirementA member may retire up to 10 years before his/her normal retirement date. The employer’s permission is required should a member wish to retire more than 5 years before normal retirement date. Members who retire prior to age 55 should note the tax implications of doing so.

2.4 Late retirement Late retirement is only allowed with the express permission of a Group Exco Member of the member’s employer. The maximum age that a member may belong to the SSUF is 70 years. A member who remains a member of the SSUF after NRD does not qualify for the assured death or disability benefits after attaining his/her NRD (Fund or GLA).

The conversion option for life cover will only be available on early or retirement on normal retirement date.

2.5 Retirement Benefit

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Pension Fund Provident Fund

BenefitMember’s accumulated fund value

Member’s accumulated fund value

Manner of payment

Maximum of 1/3, as a lump sum, balance as pension

Up to 100 % can be taken as a lump sum or as a pension

termination of membership

The benefit payable at resignation, retrenchment or dismissal

3.1 Pension Fund – Member’s full fund value

3.2 Provident Fund – Member’s full fund value

Can be transferred to another approved fund or taken in cash.

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4.1 Pension Fund: • Member’s full fund value

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Costs:• 0.95 % x PEAR for the default benefit (average rate)• Members with cover only for death due to unnatural causes pay 35 % of normal rates

Death benefits

4.2 Provident Fund:• Member’s full fund value; plus• Assured lump sum benefit according to the

following table (only payable in case of death before normal retirement date while active in service)

Age bandDefault cover

Multiple ofPear

Maximum coverMultiple of

Pear

Rate per R1000

cover

Younger than 26 years 5 11 R0.159

26 – 30 years 7 13 R0.113

31 – 35 years 7 12 R0.113

36 – 40 years 6 10 R0.132

41 – 45 years 6 8 R0.132

46 – 50 years 5 7 R0.159

51 – 55 years 5 6 R0.159

56 years and older 4 6 R0.198

important notes:• The age above reflects the member’s current age and not the age at

which membership commenced.

• At inception members qualify for the default cover according to their age category.

• The cover level of members to whom the default applies will be adjusted annually according to the default of their age band.

• New members have the option at appointment to increase the default cover level up to the maximum level. However, any increase in excess of 1 x PEAR of the default, in the case of members younger than 55 years, will be subject to proof of good health.

• Members 55 years and older at appointment must provide proof of good health for any increase in cover above the default cover level.

Also take note of the proof free limits and the application thereof. Any cover amount in excess of the proof free limits is subject to proof of good health.

• The opted cover level of a member will be kept unchanged as the member ages, but will always be subject to the maximum of his/her age band.

• Annually on 1 May, members are given the option to adjust their cover level up to the maximum level. Any increase will be subject to proof of good health. The additional cost for any increase in the death benefits will reduce the amount available for the member’s retirement savings accordingly.

• Annually (1 May) and at inception date, a member can choose a cover level less than the default. The saving in the cost of death benefits will be applied for retirement benefits.

• Members younger than 55 years will have the option within three months after they get married or a child of theirs is born to increase the cover up to the default or by two times, whichever is the greatest (but not more than the maximum level), in multiples of 0.5. Such an increase will not be subject to proof of good health.

• Proof free limits Combined for Provident Fund and Group Life: R13 500 000

• General conditions

• All current limitations, exclusions and loadings applicable to members appointed before 1 May 2011 will still be applicable to any increased or decreased cover.

• Increases or decreases of cover can be done in multiples of 0.5 x salary. Members may elect to have no cover in the event that their fund value exceeds 1 x annual pensionable remuneration.

• Any increase in the cover will result in a decrease of the member’s savings’ contribution for retirement benefits. Likewise will any decrease in cover result in an increase in the member’s savings’ contribution for retirement benefits.

• Members 55 years and older must always provide proof of good health for any increase in cover.

• Conversion option is available to members who terminate employment if they do so before normal retirement age.

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4.3 Group Life Insurance – Death benefit and lump sum disability• Default/maximum cover level = 2 x PEAR

Minimum cover level = 1 x PEAR

• Existing members with a cover level higher than 2 x PEAR will retain their current level.

• Rate: R0.245 per R1 000 cover.

• The maximum premium in respect of members with limit cover for natural causes and full cover for unnatural causes = R410.00 pm.

important notes:• Members have an option at inception to choose a lower level

(1 times).

• Members also have an option annually on 1 May to choose a lower level.

• Members younger than 55 years, who opted for 1 times cover can, increase it to 2 times within three months of marriage or birth/adoption of a child. Such an increase will not be subject to proof of good health.

• Existing members (appointed before 1 May 2011) retain the option to increase cover at divorce, promotion and death of a spouse, but with proof of good health.

• The conversion option is available for the death benefits only and not for lump sum disability benefit.

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spouses assurance

Death cover for spouses is not compulsory.

Maximum age of spouse to qualify: 70 years

Continuation and/or conversion option is available on cessation of cover.

Maximum cover = 1 x PEAR

Existing members who have spouse’s cover of 2 x PEAR will retain the cover.

Proof free limit= R1 200 000 for cover granted as from 1 May 2011

= R9 000 000 for cover granted before 1 May 2011

= R3 000 000 in respect of Santammembers for whom spouse’s coverwas granted before 1 March 2013

Rate: R0.236 per R1 000 cover

05 The following options are available without proof of good health, but subject to the proof free limit:• New employees get a choice at appointment for death

cover on their spouse’s life.

• Existing members get a choice within three months of marriage.

Cover for de facto spouses• A registration form will need to be completed and the

application approved before cover commences.

• Medical proof of good health is a requirement.

Annual option with proof of good healthMembers will annually be granted the option to take out spouse’s cover. Such an option will be subject to proof of good health.

trauma insurance

As from 1 May 2011 trauma insurance is compulsory for all new employees.

No proof of good health is required.

• Cover = 1 x PEAR

• Maximum cover = R1 150 000

When the maximum cover limit increases the cover of existing members will increase accordingly to 1 x PEAR subject to the new maximum.

No conversion option is available on termination of employment.

Rate: R0.257 per R1 000 cover

06

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income disability benefit

Basic benefit payable after a 3 month waiting period is:

• 75 % of the first R120 000 of TGP; plus

• 60 % of the next R360 000 of TGP; plus

• 50 % of the TGP in excess of R480 000

Top-up benefit payable for certain conditions are a maximum of 25 % of TGP less the member contribution waiver of 7.5 %.

• Employer contribution waiver = 10.7 % of PEAR after 3 month waiting period. (Contribution to Provident Fund)

• Member contribution waiver = 7.5 % of PEAR after 3 month waiting period. (Contribution to Pension Fund)

• Annual ad hoc increase applies, subject to minimum of 2 %.

Proof free limit = R110 000 pm for cover granted on or after 1 May 2011

= R165 000 pm for cover granted before 1 May 2011

Rate: 0.885 % x TGP

Minimum benefit = R56 000 pa (Minimum benefit applicable as from 1 December 2009 – amount reviewed annually)

Maximum cost for minimum benefit: R200 pm

Conversion option is available.

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08 family cover – optional benefit

• Employees have a once-off option at appointment to become a member and can select to add their parents and parents-in-law. (Maximum age for parents to join is 79 years.)

• Parents-in-law can also be added within 3 months of a member’s marriage.

• The waiting period for parents/parents-in-law is six months if death is due to natural causes.

• Members can only make use of one option for cover and cannot have a combination of Option 1 and Option 2. E.g. If Option 2 is selected it will be applicable for the basic benefit, additional spouses as well as the cover of parents who are insured. (Certain conditions apply.)

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Benefits payable at death and premiums

Option 1 Option 2

Family member on whom benefit is applicable

• Basic benefit

- Principal member R27 500 R55 000

- Qualifying Spouse R27 500 R55 000

- Qualifying child aged 14 and over R27 500 R55 000

- Qualifying child aged 6 and over but younger than 14 R15 125 R30 000

- Qualifying child younger than age 6 and/or still-born child R10 000 R10 000

• Additional spouses (ex-spouse in case of divorce) R27 500 R55 000

• Legal Parents or parents-in-law R 7 500 R15 000

Monthly premiums

• Basic benefit R 8.75 R17.50

• Additional spouse R 4.00 per spouse R 8.00 per spouse

• Parent cover R22.50 per parent R45.00 per parent

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Sanlam - annual report to members for the period 1 april 2014 ......• Glacier • Sanlam Sky...

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