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

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INVESTMENT

INCOME

RETIREMENT DEATH WITHDRAWAL

COST FOR DEATH

BENEFIT

MEMBERS

CONTRIBUTIONS

INVESTMENT PORTFOLIOS

Part A: Operation of the Funds

EMPLOYER

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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

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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%

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Investments

⧁ Individual investment choice

⧁ Default = Lifestage option

⧁ If lifestage option selected – no other portfolios may be chosen

Fixed Contribution Funds

+

VARIABLE

?

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)

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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)

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Death Benefits ― (Continue)

AGE BANDRATE 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

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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)

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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

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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

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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.

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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%)

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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%)

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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

illnesses10 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

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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)

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Disability Income Benefit (Continue)

⧁ Retirement benefits continue until death or attainment

of retirement date, whichever occurs first

⧁ Increase is determined annually

⧁ Minimum increase: 2%

⧁ Cost: 0.885% of TGP (after tax deduction)

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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

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-

⧁ 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

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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

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Contributions And Benefits Of Funds

And Related InsurancePension

Fund

Provident

Fund

Group LifeTrauma Disability

Family

CoverMember 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

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Contributions And Benefits Of Funds

And Insurance (Continue)

Pension

Fund

Provident

Fund

Group LifeTrauma Disability

Family

CoverMember Spouse

Trauma

benefits

- - - - 0.5, 1 x TGP

Maximum:

R1.5 million

(tax free)

- -

Resignation/

Retrenchment/

Retirement

benefits

Fund

value

Fund value

Conversion

option for

death cover

Conversion option for

death cover(Continuation-if qualify)

Conversion

option

Conversion

option

Conversion

option

Sanlam Sky

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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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