The Absa Umbrella Retirement Fund Solutions

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1 The Absa Umbrella Retirement Fund Solutions

2 The Absa Umbrella Retirement Fund Solutions Absa Consultants and Actuaries take pride in introducing a range of individualised retirement funding solutions. The different umbrella solutions cater to different employers from individual members wanting to belong to an umbrella fund with a more structured approach, to large employers requiring flexibility, interaction and transparency. We offer three types of umbrella funds to clients: The Absa Umbrella Retirement Fund The Absa Small Business Provident Fund Employers with typically Individuals, Small, Micro 40 employees and more, and Medium businesses or high salary earners Plan based choice of Salary based contributions contributions Flexibility, interaction and Simplicity and structure high degree of choice The Absa Home Employees Provident Fund Home employees Individuals or two or three staff Plan based choice of contributions Simplicity and structure The above umbrella fund products are provided by Absa Consultants & Actuaries, an acknowledged market leader in the field of employee benefits in South Africa. Being part of the Absa Group, we have access to the considerable resources of this leading financial services group, yet at the same time remain independent and flexible, allowing us to focus on each individual employer and their unique requirements. Let s take a closer look at each of the different products. 2 Absa Umbrella Retirement Fund Solutions

3 The Absa Umbrella Retirement Fund A retirement fund you can bank on The Absa Umbrella Retirement Fund, originally launched as Compak in November 1999, is a new generation retirement fund product, which offers employers and members flexibility, control, choice and a state-of-the-art administration system. On the Absa Umbrella Retirement Fund, employees receive a comprehensive yet flexible array of benefits, geared for a changing economic environment. With the resources of the Absa Group to call upon, the Absa Umbrella Retirement Fund can be tailored to fit the needs of funds of any size and complexity. We can also provide this product through our own qualified consultants, or through independent accredited advisors. Overview The Fund is managed by an experienced and highly knowledgeable Board of Trustees, which includes qualified and expert Independent Trustees. As a result, the employer is relieved of the complexity of managing trustee responsibilities. The employer may establish a management committee for the purposes of making certain decisions in respect of the Fund. Contributions Contribution levels may vary from employer to employer depending on their retirement funding goals and the needs of their employees. Members may also make additional voluntary contributions. Retirement and Exit Benefits At retirement (between ages 55 to 70) or exit, a benefit equal to the member s equitable share in the fund will be payable. Death Benefits In the event of the death of a member, the member s share in the fund becomes payable. In addition to the share of fund, the employer can elect to provide lump sum death benefits through the Fund as a tax approved arrangement. Risk benefits may also be provided as separate unapproved benefits, outside of the Fund, subject to the requirements of the chosen underwriter and in accordance with the Income Tax Act. Other risk benefit options available includes: funeral cover, dread disease cover, monthly disability income (as a separate unapproved arrangement) and capital disability benefits. Absa Umbrella Retirement Fund Solutions 3

4 Employers are free to select any underwriter of their choice, including competitive rates through the Absa Group Risk Umbrella Scheme. Individual Investment Choices Members have a range of flexible investment options under the Absa Umbrella Retirement Fund. The Absa Umbrella Retirement Fund offers members the choice of 4 levels of investment portfolios, namely: Level 1 - Secure Level 2 - Balanced Level 3 - Flexible Level 4 - Open Model This option allows no investment choice to members; the predetermined investment is the ABSA Absolute Return portfolio. This is a low volatility portfolio with no explicit guarantee and aims to offer investors a consistent return of 4% above inflation as measured by the SA Consumer Price Index (CPI) over rolling 36 month periods. The ABSA Life Stage range is offered at this level. This option is for members who are not comfortable with making investment choices and would like to follow the predetermined risk-profiled investment path of the Life Stage. The Life Stage range of portfolios is where asset allocations change consistently between the portfolios in the range as members move from one life stage to the next. The Life Stage model, as well as single manager portfolios, are available to members at this level. This option is for members who are comfortable with making investment choices. It gives members the option of the predetermined risk-profiled investment path of the Life Stage, as well as the option of selecting any of the building blocks which make up the Life Stage range and the ability to select single manager portfolios from the Absa Asset Consulting buy-list. This option opens a selection of Absa Investment Managers unit trust platform to members. This provides a range of Regulation 28 compliant unit trust portfolio s available on the AIMS platform. Members who choose this option are those who have a level of investment sophistication or have take advice from an independent individual investment advisor. Asset Consulting Service Offering Absa Asset Consultants provide a comprehensive consulting service to clients which include the following: Development of an Investment Policy Statement for the employers Biennial review of the investment strategy of the employers 4 Absa Umbrella Retirement Fund Solutions

5 Performance of a member analysis to provide the employers with invaluable fund trend analysis Provision of comprehensive quarterly investment reviews to employers Why the Absa Umbrella Retirement Fund? The Absa Umbrella Retirement Fund offers the following key benefits to employers and employees: Simplicity of operation. Highly experienced board of Trustees ensures best operating practice and compliance. Better fund governance. Impartial management from independent Trustees, cost effective rates and greater flexibility. More information and control. Absa s cutting-edge daily unitised administration system will allow members of the Fund to track their individual portfolio performance and exercise their individual investment choices via the internet. Greater flexibility for employers and employees. Industry-leading flexibility in terms of benefit options, benefit levels, contribution levels, investment managers and investment options. Greater cost efficiency. The Absa Small Business Provident Fund Unique provident fund for small, micro and medium businesses The Absa Small Business Provident Fund is designed specifically with the small, micro and medium business in mind, and there is no minimum number of employees you need to have in your employ before you can participate in the Fund. It is cost-effective, and moreover, results in a strategic benefit for your business. By registering your employees with the Absa Small Business Provident Fund you will provide them with retirement and withdrawal benefits, and provide support to employees and their families in the event of death and disability, as well as providing funeral benefits. The Fund is structured as a provident fund, offering lump sum retirement and withdrawal benefits, with associated separate group schemes offering death, capital disability and funeral benefits. This is an off the shelf product, with little choice or flexibility, other than contribution amounts, resulting in an easy to understand, simple and cost effective employee benefit solution. By offering employee benefits through the Absa Small Business Provident Fund, you Absa Umbrella Retirement Fund Solutions 5

6 may have the competitive edge and reap the benefits of stable and more productive employees, which in turn can lead to higher productivity and better benefits. By registering your employees as members of the Fund, your social responsibilities towards them at retirement, in the case of disablement or unforeseen death and the resulting funeral costs and financial assistance towards dependents afterwards, could decrease significantly or at least be pre-funded. The Absa Small Business Provident Fund offers you a choice of nine plans. You can choose the most suitable plan for each employee according to his or her needs and salary. Contributions range between R120 (Plan A) with no risk benefits, to R1 312 (Plan J) with R death and capital disability cover as well as standard funeral benefits of R Why the Absa Small Business Provident Fund? Retain valuable employees Transferable benefits Peace of mind (to other j j approved j Funds on exit) Simplicity and ease of payment (debit order contribution payments) The Absa Home Employees Provident Fund The Absa Home Employees Provident Fund is a retirement fund specifically geared towards home employees such as gardeners and domestic servants. It is costeffective and there is no minimum number of employees you need to have in your employ before you can participate in the Fund. By registering your employees with the Absa Home Employees Provident Fund you will provide them with retirement and withdrawal benefits, and provide support to employees and their families in the event of death and disability, as well as providing funeral benefits. The Fund is structured as a provident fund, offering lump sum retirement and withdrawal benefits, with associated separate group schemes offering death, capital disability and funeral benefits. The Absa Home Employees Provident Fund also offers you a choice of nine plans all of which have their own benefit structure. You can choose the most suitable plan 6 Absa Umbrella Retirement Fund Solutions

7 for each employee according to his or her needs and salary. Contributions range between R120 (Plan A) with no risk benefits, to R1 312 (Plan J) with R death and capital disability cover as well as standard funeral benefits of R How do I know which product is best for me? The Absa Umbrella Retirement Fund Employers with 40 employees and more, or for fewer members if high earners Salary based contributions Flexible Investment Choice Flexible Risk Benefits Web access for the employer and members Priced per employer and member choice The Absa Small Business Provident Fund Individuals, Small, Micro and Medium businesses Plan based (choice of 9 fixed plans) No investment options No risk benefit options outside what is offered by the individual plans Simplicity, cost effective and off the shelf structure Fixed pricing structure The Absa Home Employees Provident Fund Home employees Individuals, or two or three staff Plan based (choice of 9 fixed plans) No investment options No risk benefit options outside what is offered by the individual plans Simplicity, cost effective and off the shelf structure Fixed pricing structure Contact us Please feel free to contact us with any queries you might have regarding the Absa Umbrella Funds. Absa Consultants and Actuaries would appreciate the opportunity to discuss our range of employee benefit solutions in details. Contact us on and ask for new business development. Absa Umbrella Retirement Fund Solutions 7

8 Absa Consultants and Actuaries (Pty) Limited. Reg no. 1961/001434/07. Authorised Financial Services Provider.