OLD MUTUAL SUPERFUND ORION PRODUCT GUIDE

Transcription

1 OLD MUTUAL SUPERFUND ORION PRODUCT GUIDE

2 Old Mutual continues to play a major role in providing retirement fund structures and retirement solutions that are appropriate to all South Africans. At Old Mutual we believe that all South Africans should be afforded the opportunity to save for retirement and build financial security for themselves and their dependants. It was with this aim in mind that Old Mutual pioneered the umbrella fund industry with the introduction of Orion more than 25 years ago, so that employees of smaller companies could also benefit from group retirement savings and risk benefits. Since it was launched, Orion has proven its worth by assisting many South Africans and their dependants to build financial security. Over the years Orion has paid out many billions of Rands in benefits that have been a lifeline to many families. In keeping with Old Mutual s commitment to doing great things, Orion has continued to evolve over time so that today it still remains the top choice for employers seeking to do great things for their employees.

3 CONTENTS 01 Introduction... 1 What is an Umbrella Fund?...1 Why an Umbrella Fund?...1 The Old Mutual SuperFund product range...2 ORION A Product within the Old Mutual SuperFund range...2 Master and Special Rules/Master Policies and Policy Schedules... 2 Definition of Scheme Participation criteria...3 Participation requirements...3 Summary of participation rules...3 Participation of subsidiaries in a group of companies...3 Disability Claimants transferring from another insurer...4 Sectoral and Union Fund exemptions...4 Transfers from another insurer...4 What participating employers receive at commencement of participation What Orion offers you...5 Retirement Benefits...5 Old Mutual SuperFund Pension and Provident Funds...5 Eligibility...5 Optional and Compulsory Membership...5 Member s Accumulated Credit...6 Cessation of Participation...6 Continuation of Membership...6 Member Groups...6 Retirement Age...6 Investments...7 Withdrawal Benefits...9 Death and Disability Benefits...9 Death benefits...10 Family benefits...11 Disability benefits...12 Lifestyle Cover...15 Unclaimed Benefits...15 Funeral Support Service...16 Travelling Nurses...16 HR Fund-backed Housing Loan Surety...18 MyClient Corporate Web for Intermediaries...19

4 04. Operation and Processes...22 Quotation System Processes...22 Monthly Data and Contribution matching...22 Deduction and Collection of Contributions...22 How does the Authorised Collection payment method work?...24 Claims Processes and Requirements...24 Retirement Benefit Claims...24 Withdrawal Benefit Claims...24 Disability Benefit Claims...24 Death Benefit Claims...24 Family Funeral Benefit Claims...24 Unclaimed Benefit Claims...25 Prior Claims (deductions from member s retirement fund benefit)...25 Mandatory SARS requirements...25 Annual Rate and Fee Review...26 Commission...26 Underwriting...27 Quotations to change the existing structure of a scheme...28 Application to change the benefit structure of a scheme...28 Changing a company s name...28 Turnaround times Expenses and Fees Communication Taxation A summary SuperFund Preserver - In fund Preservation Fund Select Annuity - for a seamless transition of retirement savings Terminations Useful contact information...37

5 01 INTRODUCTION What is an Umbrella Fund? Umbrella funds are retirement funds registered with the Registrar of Pension Funds and as such are governed by the Pension Funds Act, 1956, as amended. The Commissioner for Inland Revenue also approves these funds, contributions and benefits are taxed in accordance with the Income Tax Act. Umbrella funds generally have a standard set of rules (the Master Rules) with limited contribution and benefit options that are registered with the Registrar of Pension Funds. Individual employers then may set up a retirement fund for their employees where the retirement fund must comply with the rules and policy conditions applicable to the Umbrella fund. In most instances the Umbrella Fund only offers defined contribution funding and both pension and provident fund options are available from most suppliers. Why an Umbrella Fund? The purpose of an Umbrella Fund is to pool members from many employers to determine the costs, especially in respect of smaller employers who do not wish to be saddled with the onerous requirements and costs that a stand-alone fund would present them with. The major benefits of an Umbrella Fund are: Lower administration costs, Lower costs associated with governance issues, e.g. trustee board expenses are included in the administration fees, Lower risk benefit costs, Lower investment fees, The employer operates in an environment of greater certainty, enjoys much lower risks and has fewer obligations compared to a stand-alone fund, and Easier access for members to financial advisers. 1

6 The Old Mutual SuperFund product range Flexibility OLD MUTUAL SUPERFUND Member Choice Employer Defined Package Easy Benefit Plan Orion Evergreen Evergreen Investment Advice Preserver In-fund Preservation Simple Package Micro (<20) Small Medium/Large Employer size/complexity The Old Mutual SuperFund Pension and Provident funds are legal entities of which Orion, Evergreen, Evergreen Investment Advice and Easy Benefit Plan are products within these entities. The SuperFund appoints one Trustee board that is responsible for the fiduciary duties under these funds. Should the rules be in conflict with any legislation or regulations issued in terms of legislation, the legislation or regulations must prevail. ORION - a product within the Old Mutual SuperFund range Since its formation in 1985, Orion has become a recognised market leader in the field of umbrella fund arrangements for the SME (small to medium-sized employers) market. The Product range is as follows: Retirement Benefits: Pension Fund, and Provident Fund. Death and Disability Benefits: Group Life Assurance Benefits, Disability Income Benefits, and Family Benefits. Master and Special Rules/Master Policies and Policy Schedules The SuperFund Pension and Provident Funds are governed by a set of Master Rules applicable to all participating employers and members of the Fund. Non-fund (unapproved) risk benefits are governed by a separate set of Master Policies. In addition, each participating employer is issued with a set of Special Rules and/or Policy Schedules that set out certain additional terms and conditions, as applicable to that participating employer. Definition of Scheme Scheme means the separately registered sub-fund in respect of each participating employer, to which the Special Rules or Policy Schedule apply. 2

7 02 PARTICIPATION CRITERIA Participation requirements Orion Investment/ Savings only Orion Risk Benefits with or without Investment/ Savings Total monthly contributions at least R OR at least 10 members At least 10 members 100% of eligible employees must participate If GLA/Accident/Family Benefits selected, all members must be covered. If Disability Income/LSDB selected, all members must be covered for only one of these. If GLA selected: Minimum of 10 members per defined benefit level (multiple or fixed amount)*. * For a scheme with at least 50 members or R total monthly contributions, this requirement will be waived only for an executive/senior management group with less than 10 members. Summary of participation rules 1. A minimum of 10 members OR minimum of R total monthly contributions is required in order to participate in Orion. 2. Risk rules: If a risk benefit type is selected, all members must be covered for that risk benefit type (this excludes members currently in receipt of disability income benefits). Minimum of 10 members per GLA multiple (if the scheme has a minimum of 50 members OR a minimum of R total monthly contributions, executives/directors/senior management numbering less than 10 members can be covered for a GLA multiple different to other members on the scheme. Participation of subsidiaries in a group of companies Employers often would like to register all the subsidiaries of a group of companies in one sub-fund (scheme) with one set of Special Rules. The Registrar of Pension Funds will not register a single sub-fund (scheme) for multiple companies. Regulation 30(2)(t) specifically directs that each separate employer must register as a separate sub-fund or scheme in an umbrella fund. Regulation 30(2)(t) to the Act provides as follows: (2) the rules of a pension fund shall furthermore not be inconsistent with the Act and these regulations, and shall also, subject to sub-regulation (3), provide for the following matters: (t) a specific indication of the participation in the pension fund so as to differentiate between pension funds established for the benefit of (i) employees of a principal employer and its subsidiaries; and (ii) employees of various employers that do not fall within the ambit of sub-paragraph (i) above. Practically this means that, even where all the employees in a group of companies have an identical benefit structure and the subsidiaries are 100% owned by the parent company, each employer must establish a separate sub-fund. 3

8 Disability Claimants transferring from another insurer Where a client is transferring from another insurer to Old Mutual, and their membership includes a Disability Income claimant (i.e. a member who is receiving a monthly disability benefit or where a disability claim is pending), a separate Member Group must be created for this member. Sectoral and Union Fund exemptions Where an employer would normally be compelled to join their employees to an Industry, Bargaining Council, Sectoral or Union Fund, the Financial Services Board (FSB) requires that the company be in possession of a valid exemption certificate before allowing the company to participate in another fund. Therefore, employees who belong to or for who it is compulsory to join an Industry, Bargaining Council, Sectoral or Union Fund, must first apply for exemption from the Industry/Bargaining Council Fund and provide a copy of the exemption certificate, before applying for participation in the Old Mutual SuperFund Pension and/or Provident Funds. In these cases we will require a copy of the certificate and will attach it to the registration documentation submitted to the FSB. Transfers from another insurer S14 requirement checklist, for schemes transferring from another insurer to Old Mutual SuperFund (Orion): Previous fund name, Previous fund tax registration number, A copy of the previous fund s tax registration certificate, Previous FSB registration number, Original commencement date of previous fund, Previous fund administrator/insurer, Previous administrator/insurer telephone number, Fund transfer asset value (estimated value), Type of previous investment vehicle, Previous fund code, Contact person at previous administrator/insurer, Benefits enjoyed by the members: we require a copy of the underwriting decision letter for each member on the underwriter s company letterhead, confirming underwriting terms, accepted covers, free cover limit, forward underwriting limits, health loadings and exclusions, Copy of the notification of termination with the previous administrator, In terms of employer waivers, confirmation of who is paying the waiver and the amount, as well as confirmation that the previous underwriter has been provided with Old Mutual s (Orion) banking details, and Confirmation of pending disability claims and disability income claimants. What participating employers receive at commencement of participation Once the scheme has been launched, the client will be supplied with the following: Scheme Code to be used for future reference, Contact details of a dedicated Client Liaison Consultant should you have any question or require assistance, New Entrant Certificates, Special Rules and Policies, as well as Master Rules will be sent to you electronically. 4

9 03 WHAT ORION OFFERS YOU Retirement Benefits The key differences between a pension fund and a provident fund are as follows: PENSION FUND A pension benefit is provided on retirement, with max. of 1/3 cash benefit. Employee contributions are tax deductible to a max. of 7.5% of pensionable salary or R1 750 p.a. On withdrawal R is tax-free. Additional voluntary contributions for employee are tax deductible to a max. of R1 800 p.a. PROVIDENT FUND A lump sum benefit is provided on retirement (which may be used to purchase a pension). Employee contributions do not enjoy tax relief on their earnings. On withdrawal the member qualifies for R of his/her accumulated credit as a tax-free portion. No tax relief on additional voluntary contributions. A minimum of 2% of the total contribution rate must go towards retirement funding. The employer s contribution, towards retirement, may not be less than zero. Employer contributions up to 10% are tax deductible (however, SARS currently allows a maximum deduction of up to 20%). All benefits that accrue to members below the tax threshold are tax-free. Old Mutual SuperFund Pension and Provident Funds The Old Mutual SuperFund Pension Fund and the SuperFund Provident Fund are each legal Fund entities registered and operated in accordance with the Pension Funds Act. The aim of each Fund is to provide Employers with vehicles with which they can assist their employees to accumulate sufficient assets to retire comfortably. The employee will become a member of whichever Fund the Employer participates in. Membership is compulsory for all eligible employees joining the Employer. The eligibility criteria will be spelt out in the special rules drawn up when the Employer participates in the Fund. Orion, as a product under the Old Mutual SuperFund range, offers integrated defined contributions, with Old Mutual investment and risk products included. Eligibility The rules of a scheme must specify which employees of a Participating Employer are eligible to join the scheme. Eligibility is restricted to employees who are under the normal retirement age as at the date of commencement of the scheme (not applicable where scheme is transferring from another Fund) or at the date that membership would otherwise commence. This specification must be done in terms of member groups where applicable. Optional and Compulsory Membership For a tax-approved scheme, the Income Tax Act requires that existing eligible employees at the date of commencement of the scheme shall have the option of joining the scheme provided they do so within 12 months of the date of commencement of the scheme. For all new eligible employees, membership is compulsory. 5

10 Member s Accumulated Credit Orion is a money accumulation product. Each member s account is kept separately and the balance in this account is called the member s accumulated credit. The member account consists of: Member s own contributions, Member s voluntary contributions, Employer s contributions in respect of retirement funding, Employer s voluntary contributions, Amounts transferred from other funds, Transfers i.r.o. surplus apportionment schemes, and Late payment interest in terms of S13a: Equals: Less: Plus: Equals: Total contributions and transfers Risk premiums Expense fees Fund interest (net) Member Accumulated Credit Cessation of Participation If a member ceases to be an eligible employee for reasons other than retirement, disability, withdrawal from service or death, his participation will cease on the first day of the month following or coinciding with the date on which he ceases to be an eligible employee. The member s benefit will be calculated in terms of the rules of the scheme as at the date of ceasing to be eligible and may be transferred to an approved Pension, Provident Preservation or Retirement Annuity fund for the benefit of the member, or paid in cash. No provision is made for the benefit to remain paid up in the scheme. Continuation of Membership In all cases other than where a member ceases to be an eligible member, a member of a scheme is obliged to remain a member until his retirement, death, disability or withdrawal from the employer s service. Member Groups An Employer may decide to separate employees into different member groups. These member groups are not permitted to be based on discriminatory factors, such as race, age, religion or gender, and should be based on specific differences in occupation type. For example an airline may decide to have three member groups: pilots, flight crew and all other staff. Member Groups are useful for the following reasons (on condition that participation rules are adhered to): Each member group may have a different normal retirement age assigned. Each member group may have different risk benefits. Each member group may have different retirement funding contributions. Retirement Age Normal Retirement Age This is the date which the participating employer specifies in the special rules as the date at which a member must retire. Legislation and Approval by the Authorities The Pension Funds Act does not impose any minimum or maximum retirement age for Pension funds or Provident funds, but the Registrar of Pension Funds could, in terms of his discretionary powers, disallow an extraordinarily early retirement age. The Income Tax Act does not impose any minimum or maximum retirement ages on Pension funds, but for tax-approved Provident funds, members may not retire before age 55, except on grounds of ill-health. 6

11 Normal Retirement Age (NRA) and Normal Retirement Date (NRD) NRD is defined as midnight on the last day of the month during which the member attains the NRA. The normal retirement age ranges from 55 to 65. Early retirement For the Pension Fund A member may retire before the normal retirement age provided that: The member is not more than 10 years away from the normal retirement age, and The member has permission from the Employer. For the Provident Fund The member is at least 55 years old, and The member has permission from the Employer. Ill-health retirement (early retirement) A member may retire at any time before the normal retirement age for ill-health, if: The member becomes permanently unable to perform their own work due to an illness or disability, Has a medical certificate in support of the ill-health, and The member has permission from the Employer. Late retirement A member may retire after the normal retirement age provided that: Contributions continue to be paid for service beyond the normal retirement age, and The member has permission from the Employer. Investments Generally the assets of a fund are accumulated in one or more investment channels, as agreed by the Management Board (Trustees) of the fund. Orion recognises that different employers have varying investment needs. Employees, as defined by the employer within specific member groups, therefore have access to the following investment portfolios: TRUSTEE DECLARED FUND Old Mutual Smooth Bonus Fund (Absolute Stable Growth Portfolio) MARKET-LINKED PORTFOLIO The SYm metry Aggressive Fund The SYm metry Managed Fund The SYm metry Absolute Balanced Fund The Old Mutual Albaraka Balanced Fund KEY ATTRIBUTES The fund interest rate is declared by the Trustees based on the performance of the investments chosen to form part of the Trustee Declared Fund and attempts to smooth out fluctuations in the market conditions, ensuring a high but stable accrual of investment returns. The Old Mutual Smooth Bonus Fund provides a substantial guarantee, in that the vested assets cannot be reduced through adverse changes in the market values of the underlying assets. Multi-Manager portfolios are designed to package the skills of a number of the best asset managers into a single pooled portfolio. SYm metry portfolios operate on a daily unit pricing. 7

12 Employers may select a combination of the Trustee Declared Fund and one of the Market-Linked Portfolios, e.g. MEMBER GROUP TRUSTEE DECLARED FUND MARKET-LINKED 1 100% Absolute Stable Growth Portfolio 0% SYm metry Aggressive 2 0% Absolute Stable Growth Portfolio 100% SYm metry Aggressive 3 50% Absolute Stable Growth Portfolio 50% SYm metry Aggressive 4 25% Absolute Stable Growth Portfolio 75% SYm metry Aggressive Note: An employer cannot select two different market-linked portfolios (e.g. cannot have both Aggressive and Absolute Balanced on one scheme, but can have the Old Mutual Albaraka Balanced Fund with another SYm metry portfolio, as long as the two portfolios are selected in separate member groups). No split investment within a member group is allowed when selecting the Old Mutual Albaraka Balanced Fund, i.e. it must be 100% invested in the Islamic Fund. SYm metry splits are only allowed in 25% increments. Voluntary contributions from members will be invested in the same way as their recurring contributions. Employer voluntary contributions will be invested in the same way as the recurring employer contributions. Five years prior to Normal Retirement Date, a member who is invested in the SYm metry Fund (except for the Old Mutual Albaraka Balanced Fund) has the option of transferring his/her investments to the Trustee Declared Fund (Absolute Stable Growth Portfolio). In order to exercise this option, the member has to complete and submit the applicable option form (available from our website). 20% of their accumulated credit will be disinvested on an annual basis from the SYm metry Fund and invested in the Absolute Stable Growth Portfolio. The first disinvestment is due five years prior to their Normal Retirement Date and will continue annually until their accumulated credit is fully invested in the Trustee Declared Fund (Absolute Stable Growth Portfolio). The effective dates of the annual switches will be the first of the month following the member s birthday and will be carried out automatically for a period of five years. In addition, all future monthly contributions will also be invested in the Trustee Declared Fund (Absolute Stable Growth Portfolio). Trustee Declared Fund Employers may choose to have assets in their members accounts invested in the Trustee Declared Fund. In the Trustee Declared Fund the Trustee Management Board choose investment vehicles where assets are invested; based on the returns on these underlying investments, they declare fund interest rates to members at regular intervals. The investment vehicle chosen by the Trustees for the assets in the Trustee Declared Fund is the Old Mutual Smooth Bonus Fund (Absolute Stable Growth Portfolio), subject to review. The Trustees, in consultation with the fund s actuary, declare fund interest rates monthly in advance. Trustee Declared Fund Smoothed Bonus Investment Portfolio Many participating employers and their employees may be invested in a Smoothed Bonus fund without knowing how these investments work and what their benefits are. Orion via the Old Mutual SuperFund offers members the following smoothed bonus investment portfolio: Absolute Stable Growth Portfolio (with an 80% guarantee) What is smoothing and why do it? Smoothing of investment returns is a technique used to reduce members exposure to market ups and downs. During periods of relatively strong investment performance on the portfolio s investments, a portion of investment growth is not declared in the monthly 8

13 bonuses. It is held back (in a bonus smoothing reserve, or BSR), so that in times of relatively poor investment performance, there are funds available to declare a higher investment return (monthly bonus) than would otherwise have been the case. It is important to note that any funds held back in the bonus smoothing reserve in order to smooth investment returns will be used for the future benefit of investors in the portfolio. The benefit to members of the smoothing of investment returns is a reduced exposure to the extreme ups and downs of the stock market. Smoothed bonus portfolios usually invest in the same assets as a typical market-linked balanced fund would that is, in equities, fixed interest, money market and property investments, including some offshore investment. This means that, over the long term, members would expect to earn similar returns to a comparative market-linked fund just with fewer ups and downs. In addition to smoothing, the investment portfolio offers a guarantee against any capital losses. The 80% guarantee of the Absolute Stable Growth Portfolio means that your accumulated credit can never fall by more than 20%, even in the most severe market conditions. Old Mutual uses its own capital to back this guarantee. Market-Linked Fund Employers may choose to have assets in their members accounts invested in the Market-Linked Fund. In the Market-Linked Fund the Trustees choose investment vehicles where the market value of the investment fluctuates according to movements in the underlying assets. These investments are priced on a daily basis. The investment vehicles chosen by the Trustees for the assets in the Market-Linked Fund consist of a suite of SYm metry Multi- Manager portfolios. Fund returns are directly linked to the performance of the underlying assets in the SYm metry portfolio investment income and capital appreciation or depreciation is included in the daily unit price of the portfolio. Withdrawal Benefits If an employee leaves the service of the employer through dismissal, resignation or retrenchment, they may simply continue their SuperFund membership by becoming a Preserver member. For more information on Preserver, please refer to page 32 of this document. Alternatively, the employee can cancel their SuperFund membership and transfer the benefit, tax-free, to another approved retirement fund (including a retirement annuity or preservation fund) and/or choose to have the benefit paid in cash (subject to tax). The transfer of the benefit is subject to legislation, and the rules of the receiving fund, at the time of transfer. Death and Disability Benefits Core risk/insured benefits from the Pension or Provident Funds The core risk benefits are available through the Pension and Provident Funds to Employers to cover groups of employees. These benefits consist only of: Group life assurance cover providing a benefit in the event of the death of the member. Lump sum disability cover providing a benefit in the event of the permanent disability of the member. The premiums for these benefits are tax deductible for employers and employees. This, however, results in the benefits being subject to taxation. These benefits are often referred to as approved risk benefits due to the fact that the revenue authority has approved their premiums to be tax deductible. Death benefits are payable to the beneficiaries and/or nominees of a deceased member. Distribution of the benefit is subject to approval by the Trustee Management Board and must be in terms of the provisions of section 37C of the Pension Funds Act. 9

14 The two policies that provide Group Life Assurance and Disability benefits are the Group Life Assurance Policy and the Reassurance Policy. GROUP LIFE ASSURANCE POLICY The contract is in the name of the participating employer. The death and disability benefit is unapproved and therefore tax-free. Death benefits are payable to the beneficiaries. REASSURANCE POLICY The contract is in the name of the retirement fund. The death and disability benefit is approved in the hands of the fund and would therefore be taxed when with the fund. Death benefits are payable to the fund and subject to the provisions of section 37C of the Pension Funds Act. Risk/insured benefits offered outside the Pension and Provident Funds ( unapproved ) The premiums for these benefits are not tax deductible. As a result the benefits are not subject to taxation. These risk benefits are often referred to as unapproved risk benefits due to the fact that they cannot be approved by the revenue authority to make their premiums tax deductible. These risk benefits require the Employer to set up a separate policy with an insurer to cover groups of employees. These benefits include: Group life assurance cover providing a benefit in the event of the death of the member. Lump sum disability cover providing a benefit in the event of the permanent disability of the member. Disability Income benefits using the Old Mutual Selektor product. Family benefits providing cover in the event of a death in the immediate family. Death Benefits Group Life Assurance (GLA) Benefit Offered as a multiple of salary (up to a maximum of 10 x annual salary or R35 million), OR Fixed rand amount (flat cover) (up to a maximum of R35 million). Accident Death Benefit Death as a result of an accident means that death was caused by bodily injury resulting solely from external, violent and accidental means and that death occurred within the 12-month period immediately following such accident. Cover equals: 100% or less of the Group Life Assurance benefit to a maximum of 5 x annual salary. Not offered without Group Life Assurance benefit. GLA Conversion Option On withdrawal and retirement from the Scheme before the age of 80, a member will be entitled to take out an individual whole life or endowment assurance policy or retirement annuity contract with Old Mutual, without having to provide evidence of health other than a cotinine test for non-smokers, subject to application being made within 60 days of leaving the Participating Employer s service. Cover under the individual policy will not take effect until a date on or after the date cover ceases under the group policy. In the event of the death of a member during the 60-day period, the underwriter shall pay an amount equal to the maximum sum assured for which the member could have effected a policy in terms of this option. The maximum sum assured allowed under this option will be equal to the amount of life cover on the member s life immediately prior to the date of withdrawal from the Scheme. 10

15 The rate of premium for such a policy will be determined in accordance with the life assured s age at the effective date of such policy and the conditions attaching thereto will be those applicable to similar ordinary policies issued by Old Mutual at that time. If cover ceases for any reason prior to the member retiring, this benefit is not applicable. GLA Cover to Continue This benefit refers to the continuation of the Group Life Assurance Cover while the member is in receipt of a Disability Income benefit. In the event of a Member s disablement, Old Mutual will deduct the risk premium from the disability benefit and pay to the designated Pension/Provident/Risk scheme to which the Member belonged to immediately prior to disablement. * If both Group Life Assurance and Income Protection benefits selected, GLA Cover to Continue will be included automatically. Exclusions Deaths or disability occurring as a result of active participation in war, invasion, acts of foreign enemies, hostilities, warlike operations (whether war be declared or not), civil war, rebellion, revolution, insurrection, civil commotion assuming the proportions of or amounting to an uprising, military or usurped power, AND Death or disability as a result of the use of nuclear, biological or chemical weapons, or any radioactive contamination; or attacks on or sabotage of facilities (including, but not limited to, nuclear power plants, reprocessing plants, final repository sites and research reactors) and storage depots, which lead to the release of radioactivity or nuclear, biological or chemical warfare agents, irrespective whether any of the aforesaid has been performed with the specific use of information technology. In addition, a claim arising from death will be declined if such death is directly or indirectly attributable to wilful self-inflicted injury or suicide during the 24 months immediately following the date on which the individual first became a member. Late New Entrants Late New Entrants will automatically receive cover up to the free cover limit (refer to page 13) but specific pre-existing conditions will apply. In order to receive cover in excess of the free cover limit the member will still need to provide evidence of health. If they are then accepted for the additional cover, the pre-existing conditions will not apply. If a person who was covered immediately before the commencement date for a death benefit under a previous insurance contract, the pre-existing conditions will be backdated to the date on which he became covered under the previous contract. Family Benefits This benefit is designed to cover the Principal member, spouse (maximum 2) and children (no limit) in the event of their death to cover the costs involved in funeral arrangements and other associated expenses. This benefit cannot stand alone and must therefore be taken out with another benefit. The covers available are as follows: Main member Cover in increments of R5 000 up to the maximums listed below. Children s cover as a % of spouses cover: 14 years and older = 100% 6 13 years = 50% 2 5 years = 25% 0 1 years = 15% Stillborn = 10% 11

16 Children will remain covered to the maximum age of 21 and this will be extended up to age 25 if the child is a full-time student (with proof of studies) and will be extended indefinitely if the child is wholly, and has been continuously, dependant of the main member as a result of mental or physical infirmity that prevents him from maintaining himself. The maximum funeral benefit allowed is as follows (the participating employer s Policy Schedule needs to be consulted for actual cover amounts): MAXIMUM BENEFIT Main member R Spouse R Children +14 years R years R years R6 000 Stillborn R3 000 Disability Benefits Lump Sum Disability Benefit Disability benefits become payable on the approval within 12 months from of the assessment by the Disability Assessors. The claim must be submitted to Old Mutual after the date of disablement. The claim will only be considered if suitable medical evidence is available. The member or Employer will be responsible for the costs associated with obtaining this evidence. If a claim is admitted, the disabled member will receive a lump sum benefit (if a Provident Fund). In the case of a Pension Fund, for tax purposes, the benefit will be paid in the form of an annuity of which 1/3 may be taken in cash. Group Life Assurance benefits are required. Maximum cover = lesser of GLA benefit, 5 x Annual Salary or R5 million. Benefit reduces by 1/60th every month within the 5 years prior to NRD. Disability Definition options include: Any Occupation or Own and Any Alternative Occupation with Any Employer. Disability Benefit Conditions If a member becomes totally and permanently disabled before attaining the retirement age of his member group or age 65, whichever is the earlier, then the life cover will become payable. Orion recognises the following two types of disabilities: A. Own and Any Alternative Occupation with Any Employer Disability is recognised if a member is prevented (for the duration of the waiting period) by injury or illness from carrying out his own occupation with any employer, or any alternative occupation with any employer, for which he is suited, taking into account his age, education, training, knowledge, ability and experience, and the underwriter must be convinced that his disablement is total and permanent. B. Any Occupation Disability is recognised if a member is prevented (for the duration of the waiting period) by injury or illness from carrying out any occupation with any employer, that will enable the member to generate an income, and the underwriter is convinced that his disablement is total and permanent. 12

17 Exclusions Disablement will not be recognised if it is attributable to: Pre-existing conditions, Deliberate exposure to exceptional danger (except in an attempt to save human life), attempted suicide or self-inflicted injury, and Atomic, biological, chemical and war exclusions (refer to Exclusions and Death Benefits ). Pre-existing Conditions A claim arising from disablement will be declined if such disablement is due to an injury or condition that already exists, or a surgical operation undergone during the six-month period immediately prior to the member being insured for disability benefits and the member becomes disabled within 12 months of the commencement date. In case of a municipality or if there are less than 20 members on the Scheme, as at review date (i.e. at commencement, review of benefit of the scheme) the pre-existing period changes to two years before and two years for all new members. Funds with no risk When a member of a Pension or Provident Fund, with no risk, becomes disabled, the member must either retire or, if not yet eligible for retirement in terms of the rules of the scheme, withdraw. Disability Income Benefit In this case the individual will remain a member on the retirement fund until return to work, death, normal retirement date or age 65, whichever event shall first occur. Overview The Orion Disability Income Policy provides a monthly income upon acceptance of a disability claim by Group Assurance. The disabled member remains a member of the Pension or Provident Fund. Payment will continue until the earlier of the member s normal retirement date, age 65, when Old Mutual finds the member fit to work, or death. The amount payable is based on a percentage of annual salary the member received immediately prior to becoming disabled. Continued payment of the above benefit is subject to periodic re-assessment by Group Assurance Claims Assessors. The disability definition applicable to this benefit is as follows: Initial Period: Own Occupation with Any Employer Disability is recognised if, after the completion of the waiting period, the member is incapable of performing the type of work he/she was performing during the 24-month period, or could perform with any employer, prior to the commencement date of the waiting period. Extended Period: Any Employer Disability will continue to be recognised if, after the completion of the 24-month period, the member is incapable of performing the type of work he/she was performing after expiry of the 24-month period, or could perform with any employer, prior to the commencement date of the waiting period. Benefit Type The benefit option available is 75% or less of salary (flat basis). Commencement of Benefit Cover An Employee will participate in the benefit from the date of commencement of the Scheme or from the date of joining the employer s service, if later. Free Cover Limit [Evidence of Health (EOH) Limit] Old Mutual will not be on risk for personal risk benefits in excess of the free cover limit until the required evidence of health has been submitted and accepted. It will be the Participating Employer s responsibility to ensure that the required evidence of health is submitted, but this may be obtained at Old Mutual s expense. Old Mutual will advise the client when evidence of health is required in respect of members. 13

18 Increase in Benefit Cover Adjustments in the amount of monthly Disability Income benefit cover arising out of changes in annual salary take place immediately, provided that the insurability requirements applicable to increases in benefit cover are met. If at claims stage the Member s salary has increased by more than 20% over the 12-month period preceding disablement, Old Mutual reserves the right to limit the salary to 120% of the salary applicable 12 months before the commencement of the Waiting Period. If, however, medical evidence has been accepted by Old Mutual within the 12-month period before commencement of the waiting period, the claim will be based on the member s salary at the date of the claim. Should the member s salary increase during the waiting period, the monthly earnings will be adjusted accordingly. Continuation of Benefit Cover during Temporary Absence If a member is absent from the service of the Employer, the Disability Income cover will continue to apply for a period of 12 months, or such other period as negotiated between the Employer, the Underwriter and Trustees provided that: The member remains in the service of the Employer, and The payment of premiums is continued. Termination of Disability Income Benefit A member will cease to be eligible for the Disability Income benefit provided under this scheme and his benefit cover will cease on the earliest of: The date the member ceases to be a member prior to a claim being lodged The last day of the month in which age 65 is attained The last day of the month in which the normal retirement age is attained The date that Old Mutual finds the member fit to return to work The date of discontinuance of the Disability Income benefit under the scheme The date on which payment of Disability Income premiums ceases The death of the member Waiting Periods The following waiting periods are available: 6 months 3 months or 3 months with payment backdated by two months Each one of these has a different cost implication. Employer Waiver This benefit constitutes an additional cost to the disability income premiums when elected. In the event of a member s disablement, Old Mutual will pay the employer s retirement fund contributions on behalf of the employer to the designated Pension/Provident fund, which the member belonged to immediately prior to disablement. Disability Income Conversion Option The member converts the Disability Income cover lost at withdrawal or while outside the Republic of South Africa, to an individual policy, subject to the conditions and limitations of such policy and provided that it is done within 60 days after the disability income cover ceases. This also constitutes an additional cost to the Disability Income premiums. Escalation The disability income benefit will increase at the lesser of the rate stipulated by the employer or inflation. This is an additional cost to the disability premiums. 14

19 Limitation of Benefits Benefits will be limited in terms of the ASISA s new Code of Good Practice for Disability Schemes. In order to prevent the overinsurance of disability benefits, Life Offices are urged to use their judgement and to communicate with one another in this regard. Orion therefore does not offer disability income cover and lump sum disability cover within the same member group. Pre-existing Conditions No Disability Income benefit is payable if the disability arose directly or indirectly from any of the following: An injury that occurred, an illness or condition that existed, a surgical operation undergone during the 6 months immediately preceding the date on which the member was covered for disability income benefits, the date of any increases in cover as a result of changes to the benefit structure and, as a result of which, the member claimed for a Disability Income benefit within 12 months of this date. In case of a municipality or if there are less than 20 members on the Scheme, as at review date (i.e. at commencement, review of benefit of the scheme) the pre-existing period changes to two years before and two years for all new members. Place of Residence A member who is transferred abroad by the Employer shall remain covered for a period as agreed between the Employer and Old Mutual. Should a claim be admitted in respect of a member who is disabled while outside South Africa and who remains abroad, or should a member in respect of whom a claim has been admitted in South Africa subsequently leave South Africa, Old Mutual shall not be liable to pay more than three monthly disability income instalments after the date on which the claim is admitted or the date on which the member leaves South Africa, as the case may be, unless Old Mutual and the Employer shall otherwise agree. Successive spells of Disablement Successive spells of disablement (resulting from the same cause) which are separated by six months or less shall be regarded by Old Mutual as continuous claims, and the member will not be required to be absent from work for a further period equal to the Waiting Period before payment of the Permanent Health Insurance benefit recommences. Cash4Loved Ones Benefit If a claimant dies, Old Mutual will pay a Cash4Loved Ones benefit to the employer or Proposer. No beneficiary nomination forms are required. Lifestyle Cover The practical impact of a severe medical condition on a person s lifestyle may be either temporary, e.g. during treatment for cancer, or permanent, e.g. when a person becomes a wheelchair user due to amputation of both legs. The Lifestyle Cover provides a lump sum to help with the cost of changing the way one lives after a major illness or injury. This lump sum is paid in the event of one of the following health shocks: Heart Attack Cancer Paralysis Permanent loss of limbs, hearing or sight Stroke 15

20 Clients can choose one of the following levels of cover (must apply to all members on the scheme): R R R This benefit provides a cash injection to: help facilitate lifestyle adjustment; top-up medical cover (either access better treatment or help cover any gaps e.g. prosthetic devices); protect against other expenses that can arise during this time (e.g. additional help to look after children, nursing care, or transport to and from treatment). Lifestyle Benefit cover continues automatically if a person becomes a disability income protection claimant as long as the premiums are paid. Lifestyle Benefit is only available in conjunction with Group Life Assurance or Group Income Protection benefits. A claim does not reduce death or disability cover. Multiple claims are possible for different conditions. For example, a person could claim for cancer and then the following year claim again for a heart attack. Cover is limited to one claim per rolling 12 month period. No medical underwriting is required. Exclusions The following exclusions will apply to the Lifestyle Cover product. Pre-existing conditions: A claim based on a condition for which the member received or would reasonably have received medical advice, a diagnosis or treatment during the two years before the individual s cover began is declined if the claim event is within two years after the cover began. Survival period: To qualify for Lifestyle Cover, the member must survive the health shock for at least 14 days. Claims should be submitted within an agreed period As the right to claim ends 12 months after the claim event, Old Mutual should receive the complete application for benefits within this period. Unclaimed Benefits Where Old Mutual SuperFund has not been advised of a member s choice, within 60 days of leaving the employer, the benefit will default to preservation. The default options are as follows: Automatic membership of Old Mutual SuperFund Preserver; or If the Fund has to make a deduction for a housing loan and/or employer lien, the balance of the member s benefit will be transferred to a trustee elected preservation fund; or If the Fund does not have all your personal details to transfer your benefit to the trustee elected preservation fund, the benefit will remain invested in an investment fund that preserves capital. 16

21 Funeral Support Service If the employer has selected either or both of the insured death benefit or the insured family funeral benefit, employees have access to the Funeral Support Service at no additional cost. This includes: Transportation of the deceased from anywhere in the world (economy class flights) to the final funeral home within South Africa and neighbouring countries. Transportation and accommodation for one family member accompanying the deceased where death occurs within South Africa. Discounted funeral packages (of up to 35%) with a network of funeral service providers. Legal assistance can be arranged to assist with interpreting the Will of the deceased. Advice on all necessary documentation, such as obtaining a death certificate and cross-border documentation. Referral to a pathologist if an autopsy is required. Referral to a psychologist or psychiatrist for trauma counselling. Referral for special counselling relating to the loss of a child. Referral to undertakers and providers of other funeral services, such as caterers and providers of tents. Assistance in finding a tombstone provider. Principal members and their immediate family can contact the Funeral Support Service Call Centre at , 7 days a week, 24 hours a day in all 11 official languages. Travelling Nurses In line with Old Mutual s philosophy of providing practical, people-orientated solutions, the Old Mutual Travelling Nurses service drastically reduces the hassles often associated with underwriting. This enhancement allows members to access cover sooner and more easily. Historically members had to visit a doctor for medical reports and blood tests. This requirement often left members with reduced cover until the underwriting requirements of the insurer were met. The Travelling Nurses are registered nurses, employed by Old Mutual. These nurses visit members in any of the major centres (depending on the demand, will visit other towns) at their place of work during office hours to help fulfil the initial underwriting requirements. Members can either set up an appointment themselves or you could arrange this as the intermediary by calling the call centre at The nurse will contact the member to set up an appointment at a time that is convenient for the member. When setting up the appointment, the call centre will require the following information: Scheme code Surname Initials ID number Telephone number at work Cell phone number Contact person Business address As initial underwriting is at the cost of the insurer, Travelling Nurses services are offered at no extra cost to all Old Mutual Orion clients. Please note that members must present their identity documents to the Travelling Nurse in order for the tests to be conducted. 17

22 HR911 HR911 is a phone-based service for our clients who have potential disability income claimants. Through HR911, we assist line managers and human resource staff with claim submission and the management of the employees with health conditions. Features: Direct access to our medically trained staff. A one-stop conversation: What to do with a sick employee? How do you handle certain medical conditions? Claims guidance can this become a disability claim? We help you through the claim process. Helps speed up assessment in the case of a disability claim. Provides information on accommodating people in the workplace. Provides product help and information. This feature is standard in our Income Protection policies. Simply call Fund-backed Housing Loan Surety Purpose Members of the Old Mutual SuperFund Pension and Provident Funds can use their savings in the Funds as a guarantee or surety to obtain a home loan. No direct loans will be granted by the Funds. Rules No loans, for housing purposes or any other, will be granted by the Fund. Loans must be secured from any of the major registered banks, i.e. Standard Bank, ABSA, Nedbank and First National Bank. These loans may only be used for housing purposes (purchasing a house or effecting permanent improvements to a house). The Fund will only furnish a surety for a member in respect of one property at a time. A Provident Fund member may utilise a maximum of 50% of his/her withdrawal benefit (full entitlement) as surety for a loan. A Pension Fund member younger than age 50 at date of application may utilise a maximum of 50% of his/her withdrawal benefit (full entitlement) as surety for a loan. A Pension Fund member older than age 50 at date of application may utilise a maximum of 25% of his/her withdrawal benefit (full entitlement) as surety for a loan. The amount of the loan may not exceed the lowest benefit in terms of the rules which the member would have received on termination of membership of the fund after the deduction of tax or any orders in terms of the Divorce Act, The bank issuing the loan will impose minimum loan amounts. The bank issuing the loan will impose rules regarding subsequent loans. Procedure Client approaches bank and bank staff present to members of the fund. Client presents Orion with completed Fund Member Home Loan application documents. Orion Principal Officer signs Home Loan form on behalf of the Fund. Orion and Fund Administrator signs as witness. Orion flags the member s withdrawal benefit. Fund Administrator advises representative of bank that the forms are ready for collection. Client has to implement Stop Order on member s salary for loan repayment to bank. 18

23 When a member exits the fund, Orion verifies the outstanding home loan balance with the bank, deducts any tax payable, and settles the outstanding loan with the bank. The balance of the benefit is then paid to the member/ beneficiaries. Other The employer must consent to offering the facility to its members, to do the necessary administration regarding the deduction of home loan repayments from salaries and complete the relevant application form. The employer is not liable if the member cannot make a particular monthly repayment (for example, the member is ill and does not earn a salary). In this instance, the bank is entitled to approach Orion and request Orion to honour the guarantee. As a matter of last resort, the member s entitlement can be used to pay the bank even if he/she is still working at the participating employer. There will be tax payable as a partial withdrawal. The agreement between Orion and the bank must include provisions to allow a defaulting member to forego a stipulated number of repayments, under certain defined conditions, so that partial withdrawal is indeed a last resort. In the event of a section 14 transfer of members benefits from one fund to another, the transfer values should be transferred in tact and home loan sureties should be transferred. If that is not possible, an attempt should be made to replace the loans for the members with alternative financial arrangements. As a last resort, members should be allowed to repay the loan by off-setting it against the transfer value before the transfer takes place. MyClient Corporate Web for Intermediaries The Corporate Web is an online facility, called the MyClient Corporate Web, where intermediaries will be able to view and print scheme and member information. Access to the web is available via Old Mutual s Secure Services portal, to ensure that the client s information is treated with the highest confidentiality. The following information will be available: At least the last three of all reports will be kept online. Where no report is available the scheme has not been set to generate reports, in which case the respective Liaison Consultants need to be contacted. Accumulated Credit reports Produced monthly per participating employer. The balance for each member is reflected as at the end of each reporting month. All active members are included and non-active excluded. Temporary absent members and disability claims pending are considered active members. The last payroll data submission matched to a deposit for the period reported and allocated to members will be included in the balance. If payroll data has been received and not matched to a deposit it is excluded from the balance. Member Benefit Statements Produced annually on review date per participating employer or upon fund changes where necessary. Investment Portfolio Split Report Produced monthly per participating employer. The balance for each investment fund is reflected as at the end of each reporting month. 19

24 All invested funds are included and interest bearing funds (cash) excluded. The last payroll data submission matched to a deposit for the period reported and allocated to members will be included in the balance. All active members are included and non-active excluded. Cash Flow Statement Produced monthly per participating employer. All inflows and outflows processed for the period reported are included. The balance for each entry is reflected as at the end of each reporting month. The last payroll data submission matched to a deposit for the period reported and allocated to members will be included in the balances. All scheme account balances are included, i.e. Interest Bearing Cash Funds (e.g. Claims Pending Payment) and Investment funds (e.g. Trustee Declared Fund). Detailed Transaction Cash Flow Breakdown This report reflects the detailed build up of the line entries in the Cash Flow Report. SuperFund Product Information and Newsletters This section provides weblinks to our product-related information and our latest (and historic) newsletters. Scheme Details (Basic and Contact Details) This section provides intermediaries with a summary of their clients basic scheme and contact details. How to register for this service: This service is only for intermediaries with schemes registered under Old Mutual SuperFund (Orion). 1. Intermediaries will need to register at: 2. Select Register and follow all the steps. 3. They will be required to select a password and, once successfully completing all the required steps, a user number will be allocated. Once registered, intermediaries must: 1. Go to 2. Enter their Old Mutual Secure Services user number, their ID number and selected password. Click on Login. 3. On the home page, under the heading Apply for a service, select Intermediary. 4. Then select MyClient. 5. From the dropdown list, select Intermediary for Corporate Business. 6. Enter their Sales Code. Click on Continue to complete the process. The intermediary will receive an within 24 hours, confirming that access to the service has been granted. Should they require assistance during this process, they can contact our call centre at Access for an assistant To make it easier to share information and improve service to employers, this feature allows the intermediary to grant, revoke and amend the view access for another user for specific schemes on the MyClient Corporate Web. 20

25 There is no application process; all intermediaries need to do is approve the on-line registration for 3rd party access via their existing role on MyClient Corporate Web. Only the intermediary can register the other user and will receive an the day that the registration has been authorised. The access period can be defined for the user (1, 3, 6, 9 or 12 months) and the intermediary will get a handy reminder two weeks prior to the expiry so that they can renew the access if they would like to. MyClient Support guides are available on the website. Alternatively, Old Mutual can be contacted directly as follows: For commission and intermediary data queries, call or [email protected]. For web registration and MyClient website technical queries, call or or [email protected]. For report availability, report content, web navigation, call or or [email protected]. 21

26 04 OPERATION AND PROCESSES Orion provides efficient and cost-effective services to employers, members and their advisers/intermediaries. The service platform is geared to facilitate efficient employer activities and to ensure that information is readily available, through the web, call centres and client liaison consultants. Every month registered Employers and/or the Intermediaries can access their data file (called Data-i) via our secure web. This file contains membership data and contributions. The Employer only needs to update any changes in the file and, once finalised, Old Mutual will be able to process the changes. The only other forms that the Employer has to complete are the supporting documents relating to the relevant claim notification. Quotation System Processes The quote system is a web-based application that accommodates the following processes: New Business quotation and take on, Annual Rate and Fee Review, Quotations on existing schemes (called Requotes ), and Benefit structure changes on receipt of accepted requote. It is a calculation module that stores all the underlying risk rates and administration fee structures that have been approved by the Trustees. Once the respective processes are initiated, the quote system automatically calculates the risk rate and administration charges based on the demographic data applicable. A quotation document is produced and must be signed by the participating employer. Monthly Data and Contribution matching Data ownership resides with the Participating Employer who is responsible for ensuring timeous provision of data to Orion as well as ensuring the accuracy of the data provided. The data exchange mechanism under the Orion product is via Data-i. This is a web-based application via our secure service application that allows clients 24 hour access to their data. In the case of existing members who are receiving disability income benefits, the Insurer will pay over contributions by and on behalf of these members to Orion, on the 1st of the month. Should scheme members be in receipt of a disability income benefit, and the employer waiver has been selected, these members are reflected on the monthly data/membership report with no contribution liability. This ensures that all member records are reflected and updated. Deduction and Collection of Contributions Each member s contribution is usually deducted from his salary at the end of each pay period (usually a week or a month). The member s contributions together with the Employer s contributions are paid to Old Mutual in the following form: Authorised Collection Authorised Collection facility lodged upon receipt of the monthly data detailing the amount to be lodged. Electronic Fund Transfer (EFT). For amounts in excess of the treasury limit of R , Orion will allow payment via EFT. 22

27 In terms of section 13A of the Pension Funds Act, retirement fund contributions are to be paid by the 7th of the month following that for which they are due. However, in order to ensure that contributions are deducted via Authorised Collection by the 7th of the next month, the data must be submitted by the last working day of the month to be processed. Payments received after the 7th of the month will be subject to late payment interest, which is payable to the scheme for the benefit of members. Late payment interest is calculated from the first of the month up to the actual date of payment. Any Participating Employer who does not comply with the legislative requirements relating to payment of contributions or provision of data will be reported to the Attorney General, as well as the Principal Officer, in accordance with the required procedure in all cases. Any penalties that may become payable to the FSB in terms of section 13A of the Pension Funds Act as a result of late contributions or data will be calculated and paid by the Participating Employer. You will receive an outstanding data/money letter if your client has submitted data late/paid late, even when your clients have subsequently complied. Risk premiums are due monthly in arrears. Previously, although the risk premiums were due monthly in advance, the grace period of 45 days allowed for premiums to be paid monthly in arrears. The grace period has now been changed to 30 days. Applying this from the revised due date, this effectively means that the premium must be paid within 30 days of the end of the due month. If the premium has not been received within this period, cover will be suspended. In the event that the premium is not paid within a further 30 days (60 days after due date), cover will be terminated. How does the Authorised Collection payment method work? The employer does not have to make a deposit into our bank account. Instead, as soon as the employer authorises the Data-i file, we will initiate a collection instruction from the employer s bank account for the exact amount shown in the authorised Data-i file (this will normally occur within five working days of the Data-i file being authorised). The first month s data is available for update on the Data-i system, which can be accessed via the Secure Service Option on the Old Mutual website: Tips Ensure monthly data reconciles to risk and retirement contributions. Use the data upload facility, work off-line to process your monthly data file and upload when finalised. Call Payroll Support Services at for additional information and support. Please check your Data-i reports, inserting valid comments for any unreconciled items etc. Ensure that all required information for claims is captured on Data-i. Claims Processes and Requirements Our claim forms can be obtained directly from the Orion offices, our sales branches or from the Orion website at All original documentation must be forwarded to: Applicable Orion Client Liaison Consultant Old Mutual SuperFund Orion Postal address: Street address: PO Box 728 7th floor L-block Cape Town Mutualpark Building 8000 Jan Smuts Drive Pinelands

28 Retirement Benefit Claims Retirement claims will be initiated by the submission of a manual claim form (Old Mutual SuperFund Retirement Benefit Claim Form) (in order to ensure that there has been proper consultation with the member prior to retirement). In addition, proof of age (original certified copy of ID) will be required. Withdrawal Benefit Claims Withdrawal claims will be initiated by the exiting of a member via Data-i or submission of a manual claim form (Old Mutual SuperFund Withdrawal Benefit Claim Form). Disability Benefit Claims Disability claims will be initiated by the exiting of a member via Data-i or submission of a manual claim form (Old Mutual SuperFund Withdrawal Claim Form). Old Mutual Group Assurance Disability Benefits Application. Old Mutual Group Assurance Medical Questionnaire from the Treating Medical Specialist or Hospital. Proof of age (original certified copy of ID). Job description. Copies of Sick Leave or attendance records. Copies of Specialist Medical Reports. Death Benefit Claims Death Claim Form Details of Dependants. Applicable annexures from the following: Annexure A: Dependant adult not wishing to claim Annexure B: Statement of income and expenses Annexure C: Statement of assets and liabilities Annexure D: Statement by permanent life partner Annexure E: Statement of dependency Annexure F: Police report relating to unnatural deaths Annexure G: Non-family member confirmation of dependants Death Certificate (certified copy of the original). A copy of the last will or testament (if available). A copy of the Letter of Executorship/Authority (where applicable). A copy of the Beneficiary Nomination form/s (if available). Proof of age (certified copy of original ID/birth certificates) for the deceased, spouse, children and/or nominated beneficiary/ies. Marriage certificate (certified copy of original) or sworn affidavit (i.r.o. customary marriages). Divorce court order and/or maintenance court order (certified copy of original) (where applicable). Proof of continued education in the case of eligible children over the age of 18 but under the age of 23 who are students. Medical certificate, in the case of a child who is totally incapacitated. Family Funeral Benefit Claims Family Benefit Claim Form completed in full (faxes or pdf documents will be accepted; originals must follow via post). Once submitted, changes to this form will only be accepted on a newly completed form. Death Certificate (certified copy of the original). 24

29 Proof of relationship to member. Spouse (certified copy of marriage certificate or sworn affidavit confirming relationship. Child (certified copy of birth certificate and sworn affidavit confirming relationship. Unclaimed Benefit Claims In addition to the general requirements as noted above, before an unclaimed benefit is paid out the following additional documentation is required: Completed benefit claim form. Certified copy of the member s identity document. Cancelled cheque or copy of bank statement (as proof of banking details). Prior Claims (deductions from member s retirement fund benefit) Prior claims will be initiated by the completion of the withdrawal/retirement benefit claim form, as well as an Old Mutual SuperFund Prior Claim Form. Allowable deductions from a member s retirement fund benefit in terms of section 37D of the Pension Funds Act Any amount outstanding in respect of housing loans which were granted to members directly, or in terms of a guarantee, by a Fund, bank or employer (if by an employer, evidence must be provided to confirm that the loan was specifically for housing purposes). Any amount for damages caused to the employer by the member as a result of *theft, fraud, dishonesty or misconduct. The theft, fraud, dishonesty or misconduct must have been committed while the employee was still a member of the Fund. * In this case, the member must admit liability in writing (please use this Admission of Liability Form) or Judgment should have been obtained against the member in a court of law - see the specific section below. Any amount due in terms of a divorce or maintenance court order. With the member s consent, medical aid subscriptions and insurance premiums, which the Fund pays on your behalf. Other deductions approved by the Registrar of Pension Funds (written approval is required). Which deductions are not covered by section 37D of the Act? Contractual debts like car loans or computer loans where the employee still owes a balance to the employer when he leaves (resigns or retires) the fund, cannot be deducted from the member s benefit. Mandatory SARS requirements The employer is required to supply the following information as these are mandatory fields required by SARS. Processing of benefit claims may be delayed unless all information is provided correctly: Initials, first two names and surname, ID number, Passport number and country of issue (where no SA ID number is available), Date of birth, Income tax reference number, address (where available), Cell, home telephone and/or fax numbers, Postal and residential addresses, 25

30 Bank account details, including: Bank account type, Bank account number (into which the salary, pension or annuity is paid), Bank name, Branch name and number, Account holder name, and Account holder relationship (either own, joint or third party). The following information is often omitted resulting in payment delays: 1. Tax number, 2. Bank details (in the member s name), 3. Residential address details, and/or 4. Valid ID or passport number. Annual Rate and Fee Review Old Mutual is committed to ensuring that our umbrella funds continue to provide members with leading governance and great value. As part of this commitment we undertake to be completely transparent in the way we calculate and levy fees and charges. Summary of the processes associated with the Annual Rate and Fee Reviews Revised risk rates and fees become effective on the effective date of the Annual Rate and Fee Review. The Review is produced and despatched at least one calendar month prior to the effective date. The revised risk rates and fees will impact on the total employer contribution rate for each member group unless the scheme is fully inclusively-costed (total employer contribution rate is fixed, and the balance of contributions after deducting all risk premiums and fees is allocated to retirement savings). After the last monthly payroll of the current annual cycle has been processed, the Wrap up commission (ensuring that the correct commission was paid for the review year) is triggered. After the first monthly payroll of the new annual cycle (which starts from the effective date of the Review) has been processed, following processes are triggered: Annual Member Benefit Statements. Medical underwriting for risk benefits. Annual renewal commission. If the processing of the monthly payrolls is in arrears, there will be a knock-on effect on these processes. Note that benefit changes cannot be effected during the two-month period immediately prior to the Review effective date or in the same calendar month as the Review effective month. Commission Wrap-up (adjustment) commission is calculated after the 12th-month data and money has been processed. Annual commission for the next year is authorised after the 13th-month (1st month of the next cycle) data and money has been processed. The online commission system and process the benefits include: A single set of invoices and statements, which offer a consolidated view of all business placed with Old Mutual Corporate over a particular period. Invoices and statements will be accessible online via the secure web. The new consolidated statements include a second tier, providing the detail behind each transaction. The statements detail the commission breakdown for each item of business or scheme placed with Old Mutual Corporate. Data from these statements can be downloaded as an Excel spreadsheet should this need to be reformatted for reporting purposes. For any queries in this regard, brokers can contact the Intermediary Commission and Data Desk (ICD) at [email protected] or

31 Underwriting Free Cover Limit A Participating Employer has a choice of one of two types of free cover limits, which are to apply at the participation commencement date. Standard Basis Limit The Standard Basis option offers a relatively high free cover limit and can be deduced from the name, it is the Standard Basis for Risk Benefits under Orion. Economy Basis Limit This basis offers a lower free cover limit and the costs are also lower than that of the Standard Basis Limit. The only time where no choice will be offered and only the Standard Basis Free Limit will apply is when an existing scheme is taken over from another underwriter. General Old Mutual will not be on risk for personal risk benefits in excess of the free cover limits (including the members personal free cover limits from the covers transferred from another Fund) until the required evidence of health has been submitted and accepted. It will be the Participating Employer s responsibility to ensure that the required evidence of health is submitted, but this may be obtained at Old Mutual s expense. Old Mutual will advise the client when evidence of health is required in respect of members. A member s personal risk benefit cover may not increase by more than 20% in any 12-month period once the free cover limit has been exceeded, unless satisfactory evidence of health has been submitted in that period. Should a member die within the 12-month period, the underwriters reserve the right to investigate for anti-selection against Old Mutual. Any personal risk benefit cover will be limited to Old Mutual s retention limit unless Old Mutual obtains reassurance for the amount in excess of the retention limit. The basis of such reassurance will be as agreed upon by Old Mutual and the reassurer. Retention Limit is the amount, as determined by Old Mutual, above which reassurance is to be obtained. Until such time that the requirements have been received and a decision with regard to the underwriting of the risk has been made, cover remains restricted to the evidence of health limit of the plan or previously accepted amount as communicated. Should the medicals received indicate impairments that require further investigation, Old Mutual reserves the right to request further medical information in this regard. To avoid delays and additional expenses: Old Mutual will pay for the specified medical consultation and report(s) based on the LOA tariff codes. Medical reports should not be older than 12 months when submitted to Old Mutual. Underwriting process for Deferred members A form has been created, allowing a member to give consent for Old Mutual to request additional information via the intermediary or the employer, if necessary. Where the form is signed and additional medicals are required, only one letter will be done to request the additional medical information via the intermediary or employer. If no consent is received, Old Mutual will provide two letters for deferred members; one letter addressed to the intermediary and outlining the underwriting status of the member; the second letter addressed to the member and listing the deferred medical requirements. Forms are attached to the letters and posted in a sealed envelope. Until members have received written confirmation of our decision, they should not assume that they have been accepted for their full potential cover. 27

32 Quotations to change the existing structure of a scheme A quotation (referred as a requote ) will be run and sent to the client for consideration. If accepted, the acceptance form must be signed and returned before the change can be implemented. When a quotation in respect of an existing scheme is requested, all other processing (claims, withdrawals etc.) will cease until we receive confirmation from the client to proceed with the changes or not. Quotations are valid for 90 days from date of issue. If the signed acceptance of the quote is not received within this 90 day-period, the quote will become invalid and a new quotation will have to be requested. Application to change the benefit structure of a scheme To process a change in benefit structure we require: 1. A letter from the participating employer on their own letterhead setting out the details of the required changes and specifying the effective date for the changes, and 2. A copy of the communication provided to members. We need to receive the letter prior to the effective date. The effective date must be within the 90 day validity period of the quotation, after which an updated quotation will need to be requested. Changing a company s name By law Old Mutual can only change the name of a company when the following documents are provided: Name change due to sale of business: 1. A copy of the 1st page of the sale agreement, and 2. A copy of the pages in the sale agreement where it states how the pension fund will be dealt with. Name change due to another reason: A certificate from the Registrar of Companies stating that the company s name has changed. Turnaround times Expected turnaround times for administration services (on condition that all monthly data/money is processed to date, and where all required claim information has been provided): Payroll data/money matching within 10 working days of receipt of complete information. Withdrawal and Retirement claims within 10 working days of receipt of complete information. Funeral claims within 48 hours (faxes accepted). Death claims within 15 working days of Trustee approval. Disability claims within 15 working days of Old Mutual Group Assurance s approval. Queries Response within 48 hours. 28

33 05 EXPENSES AND FEES Participating Employer Fee Member Administration Fee Fund Expense Fee Commission/Advice Fee Participating Employer per month: R415 (including VAT) using Authorised Collection R1 000 (including VAT) not using Authorised Collection To cover the fixed costs of administration relating to the employer, including fund infrastructure, data and contribution management, employer communication, etc. R23.50 (including VAT) per member per month deducted from contributions To cover the cost of administering the member account (including claims processing, member communication, reporting, etc.), as well as the ongoing management of the Fund (audit, trustee, consulting, FSB levies, bank charges, etc.). R4.50 per member per month (included in R23.50 above). LOA commission scale used. This fee is combined and charged as a single % of salary included with contributions. Investment Fees (Absolute Stable Growth Portfolio) Investment Fees (SYm metry) Currently 0.65% p.a. investment management fee PLUS 0.70% p.a. capital charge. Refer to the website for the latest fees - Fund Expense Fees FSB Levies FSB levies in respect of retirement funds are charged by the FSB, and are based on the number of participating employers and members at a date specified by the FSB. Levies are charged to the Umbrella Fund and not to the participating employer, and are paid from the Expense Reserve Account upon receipt of an invoice from the FSB. The FSB lays down charges for certain administrative procedures, e.g. the registration and deregistration of special rules, approval of section 14 transfer applications, etc. These charges are paid from the fund s reserves upon receipt of an invoice from the FSB. Payments to Fund Officers, Auditors and Third Parties Payments are made from the Expense Reserve Account to fund officers, auditors and third parties upon receipt of an invoice from any of the above. Commission Old Mutual pays commission to intermediaries in advance at inception and annually thereafter (only paid on Fridays), once a participating employer s first contribution of the next annual cycle has been received and processed. The advance payment amount is calculated based on expected annual contributions. Maximum initial and renewal commission are revised periodically in terms of the Long Term Insurance Act, Monthly commission amounts to be recouped from the fund are calculated based on the actual contributions received for the month. The amounts so recouped are paid to Old Mutual on a monthly basis. Where the intermediary is a VAT vendor, VAT is included in the advanced payment and monthly recoupments. Investment Fees Investment fees are deducted from the investment balance on a monthly basis. The level of the investment fee is dependant on the investment vehicle chosen and the amount of assets held under the chosen investment vehicle. The amount of assets is determined on an Umbrella Fund level, and not at participating employer level. For the Smooth Bonus Fund, the balance of the investment is reduced by the amount of the fee. For SYm metry portfolios, the unit holding is reduced by the unit equivalent of the investment fee. 29

34 06 COMMUNICATION The Trustee Management Board and Old Mutual agree that effective communication is a critical feature in ensuring good governance and the resultant benefit to members. There is a strong emphasis on members needs (for individuals and groups of members alike), including open channels of communication, well managed complaints resolution mechanisms and member-centric access to the SuperFund. The Board has developed a communication strategy built on the principles of King III (the regulatory South African Corporate Governance code). It wishes to demonstrate to its stakeholders (members, participating employers, intermediaries, sponsor and service providers) through its reporting and communication, the social, economic and sustainable advantages of subscribing to SuperFund. It acknowledges that the loyalty of stakeholders is not only dependant on service delivery but also being influenced to such an extent by the economic value of the Fund that they wish to be associated with it. Transparency and disclosure build trust and foster allegiance. The objectives of the Communication Strategy are to: Reach the member (physically, intellectually and emotionally); Increase accessibility to all stakeholders through communication that is understandable, meaningful and timeous; Empower stakeholders to make informed decisions; Demonstrate to all stakeholders that SuperFund is the best decision that they have made; Communicate in a manner that supports brand values and enhances the SuperFund value proposition; Deliver communication that is cost-effective; and Fully exploit new technologies in the delivery of communication. Member and employer communication New Entrant Certificates will automatically be produced at the commencement of participation. Member Benefit Statements will be produced on implementation of the Annual Rate and Fee Review and implementation of any benefit changes. Quarterly member newsletters are produced by the Trustee Management Board on all fund-related matters. A dedicated call centre is available and able to communicate to members in all the official South African languages. Annual Rate and Fee Review document: This document details the new costs, i.e. risk and administration fees applicable for the ensuing year. A Financial Wellbeing Programme is offered at no additional cost to all members and employers to assist and educate them on understanding all financial matters. Intermediary communication Regular newsletters are sent via and include news on any new developments, all fund-related matters, as well as reminders that will contribute to a better service delivery to intermediaries and their clients. 30

35 07 TAXATION - A SUMMARY Below is a table which briefly sets out the tax implications on various benefits/contributions as applicable for the 2012/2013 year of assessment. The tax exempt amount R in case of withdrawal and R in case of retirement/death takes into account all previous lump sums received or accrued, i.e. tax exempt amount is for a lifetime. PENSION FUND AND PROVIDENT FUND COMPONENTS (INCLUDING ANY APPROVED DEATH AND LUMP SUM DISABILITY BENEFITS): Employer contributions Employee contributions Past service contributions by employees Interest and net rental income earned Realised and unrealised capital gains Pensions purchased upon retirement Tax deductible up to 20% of remuneration. Tax deductible up to a maximum of 7.5% of remuneration or R1 750 for pension funds (nil deduction for provident funds). Tax-deductible up to R1 800 per year for pension funds (nil for provident funds). No tax is payable No tax is payable Pensions are taxable at marginal rates of tax in the year payable. Lump sum on retirement R0 - R % R R % of taxable income above R R R R % of taxable income above R R R % of taxable income above R Lump sum on death R0 - R % R R % of taxable income above R R R R % of taxable income above R R R % of taxable income above R Lump sum on withdrawal R0 - R % R R % of taxable income above R R R R % of taxable income above R R R % of taxable income above R All other insured benefits (not part of the approved Pension Fund or Provident Fund components): Unapproved death and lump sum disability benefits, and family funeral benefits Disability income benefits Premiums are not tax deductible by employees, and fringe benefit tax is payable if the employer pays these premiums on behalf of employees. The employer may claim a deduction as an operational expense. Benefits are tax free on payout. Employee paid premiums are tax deductible by employees. Employer paid premiums are tax deductible by employers if taxed in the employees hands. Disabilitly income benefits are taxable at marginal tax rates in the year payable. 31

36 08 SUPERFUND PRESERVER SuperFund Preserver - In fund preservation Preserver allows members to continue their Old Mutual SuperFund membership, even though they have left the employer due to dismissal, resignation or retrenchment. Their retirement savings will stay invested, continue to grow, and they enjoy investment choice and good service at a competitive rate. Advantages of Preserver Membership There are many advantages to being a Preserver Member, not least of which are: Keeps their retirement plan on track. Their retirement savings stay invested, while they enjoy investment choice and flexibility. They keep their options open. Although they should do everything possible to keep their retirement savings intact, we understand that they sometimes need access to their cash. Should the need arise, they can withdraw their retirement savings in cash. Alternatively, they can transfer their retirement savings to another retirement fund subject to legislation and the rules of the receiving fund, at the time of transfer. They have the time and flexibility to make good choices. Since their retirement savings keep on growing, they can take their time deciding what to do with them. This also gives them the time to speak to a financial adviser if they need to. Select their retirement age. They can choose to retire at any age once they have reached their 55th birthday. Find out more about Preserver Membership Read through the Preserver Member Guide to get a full understanding of the benefits, investment options and how to make Preserver a vital part of the members financial planning for the future. Access the Preserver Member Guide at or contact the SuperFund Service Centre at Who is eligible to become a Preserver Member Preserver membership is only available to members of the Old Mutual SuperFund. Preserver membership is not available if, on leaving the employer, a housing loan or employer lien deduction has to be made against the benefit in terms of section 37D of the Pension Funds Act. However, all is not lost in this situation members can still keep the balance of their retirement savings intact by transferring to another retirement fund. 32

37 09 FUND SELECT ANNUITY For a seamless transition of retirement savings When a member retires from a retirement fund, they re faced with the complex choice of what to do with their retirement savings. In reality, some members are intimidated by the Financial Advice Process or the wide range of options available to them. This can result in poor financial decisions being made, so we ve tried to make things a little easier. The Old Mutual Fund Select Annuity offers a seamless transition of a SuperFund member s retirement savings to a trusted annuity option, chosen and endorsed by the Old Mutual SuperFund Management Board of Trustees. Key features of the Old Mutual Fund Select Annuity Value A favourable annuity rate; and Available with or without professional financial advice. Should a member use an adviser, an advice fee may be payable to the Financial Adviser. Protection A life guarantee (to ensure the annuity provides income for the member as long as he/she is alive); Protection against inflation through participation in the bonus of the underlying investment portfolios; and The ability for members to specify a second life to be covered (e.g. a spouse or partner) and the level at which the annuity must continue for a second life (such as 50%, 75% or 100%). Flexibility Members may select whether the annuity must be paid for a guaranteed term once it begins (e.g. 5, 10 years up to a maximum of 25 years). In the event of a member s death before the expiry of the guaranteed term, the annuity will continue to be paid for the remaining balance of the term and if a second life was selected the annuity will only reduce to the selected level on the expiry of the guaranteed term; and Members can select the portion of their retirement benefit that they wish to apply to the Fund Select Annuity, with the balance invested in an alternative annuity or, subject to Income Tax regulations, taken as cash. Support The service and administration of the annuity is fully supported by a dedicated decision support centre where members can get general or annuity specific information, obtain no-obligation quotations and get administration support if they wish to purchase the annuity; and It is made clear to members that this is not a financial advice line, although members can easily be put in touch with a financial adviser if they need advice or want to explore complimentary or other annuity options. 33

38 Which members are best suited to the Old Mutual Fund Select Annuity? The Old Mutual Fund Select Annuity is a generic annuity product designed to meet the needs of most members retiring from the Old Mutual SuperFund retirement funds. However, some members may require specific solutions based on their personal circumstances. These members remain free to choose any other suitable annuity product, or to use the Old Mutual Fund Select Annuity in combination with other annuities. Members need to have a clear understanding of their personal financial situation before making a decision so we encourage them to make use of a Financial Adviser and to seek further information about the options available to them. More information is available in the handy document Member information booklet: Your options on retirement available under the Useful Documents section of our website, How should retiring members apply for Fund Select Annuity? 1. Read about the benefits of the Old Mutual Fund Select Annuity by referring to Member fact sheet available on our website, 2. Obtain a quotation, when approaching retirement, by: Completing the Fund Select Annuity Quotation Request Form (available on our website, or by Calling or ing [email protected]. 3. If the member is happy with the quotation, the Old Mutual SuperFund Retirement Claim Form is completed, and the retirement claim process continues as per standard practice. 34

39 10 TERMINATIONS Overview In terms of the Pension Funds Amendment Act, 1997 (94 of 1997), terminations are either subject to the provisions of section 28 or section 14 of the Act. Section 14 Provides for the approval of a transfer of a group of members from one scheme to another. Section 28 Regulates the voluntary liquidation of a scheme, by providing for the following: The appointment of a Liquidator, Submission of statements, Disclosures, and Consideration of objections. Reasons for Termination A participating employer shall give written notice, with reasons, that they have decided to cease their participation in the scheme. The employer s participation in the scheme will be terminated in terms of the rules based on any of the following reasons: Transfers to another Fund, Employer is wound up or ceases business, Termination after the exit of all members (deregistration), and/or Termination at the instance of Old Mutual (non-viable or non-payment of contributions) or non-receipt of data. Termination Conditions A two-month notice period is required. After expiry of the notice period: No further contributions will be payable. Old Mutual reserves the right: to defer payment for up to one year and/or to limit the total to the Guaranteed Amount. During the payout period: Fund interest declarations and practices would apply to the Participating Employer s scheme as if contributions were continuing to be paid to Orion for investment, except that if Trustees were to adopt a new form of fund interest for such contributing schemes, it would not necessarily apply to those terminating. On Liquidation: The assets are switched to the bank account as soon as the Trustees sign the resolution appointing the Liquidator. No further contributions will be payable to the scheme. 35

40 Application for Exemption from section 28 of the Pension Funds Act The Registrar will consider an application for exemption where the following conditions apply: The average benefit per member is less than R50 000, The fund or the relevant participating employer withdrawing does not have more than 50 members, The fund or the relevant participating employer has assets less than R50 million, and The surplus apportionment scheme or nil return has been approved or noted by the Registrar. Determination of Assets The value of the assets is determined by doing a final scheme account taking into consideration the following: Fund interest to date of payment, Liquidator s fees, FSB charges, and Advertising costs, etc. The scheme assets are distributed as follows: A. Surpluses/Deficits In terms of the Second Amendment to the Pension Funds Act (2001), Trustees of retirement funds must investigate the history of the fund (as far back as 1980) in order to determine whether a surplus or deficit exists. This could result in either the submission of a Surplus Apportionment Scheme in respect of a surplus or a No Surplus report in respect of a deficit or zero effect, to the Financial Services Board (FSB). This submission must be done within 18 months of the Surplus Apportionment Date. B. Current members All live members as at the date of termination. C. Former members Members, who withdrew within a specified period (usually 12 months) before the termination of a participating employer s scheme, may be taken into account in the distribution of assets. Any benefit already received must also be taken into account. There is no monetary gain for the Employer in the event of the termination of his scheme. Options available to members on Termination On Transfer (section 14) All members must transfer to the designated approved Pension or Provident Fund(s). On Liquidation (section 28) Cash transfer into the member s bank account. Transfer to a Retirement Annuity. Transfer to a Preservation Fund. The accumulated credits of those members who cannot be traced will be transferred to the Guardian s Fund. 36

41 11 USEFUL CONTACT INFORMATION A participating employer s first point of contact is their appointed intermediary. The intermediary s first point of contact is their dedicated Orion Client Liaison Consultant. Orion website reference Payroll Support Services contact number Member call centre contact number Member call centre address [email protected] 37

42 omms L6736 Regulatory information: Old Mutual Corporate is a division of Old Mutual Life Assurance Company (South Africa) Limited, Jan Smuts Drive, Pinelands, 7405, South Africa. Registration no: 1999/004643/06. Old Mutual Life Assurance Company (South Africa) Limited is a Licensed Financial Services Provider authorised in terms of the Financial Advisory and Intermediary Services Act, 2002, to furnish advice and render intermediary services with regard to long-term insurance and pension fund benefits, as well as providing intermediary services as a discretionary investment manager. Please note that this license does not cover the marketing of this product by persons other than Old Mutual and its staff. This document has been written for easy reading. Every effort has been made to ensure that this document and the products referred to, meet the statutory and regulatory requirements, pertaining to the manner and format in which information regarding financial products is presented. However, should you become aware of any breach of such statutory and regulatory requirements, please address the matter in writing to: The Compliance Officer, Old Mutual Corporate, PO Box 728, Cape Town 8000, South Africa.