It appears that the deal where Sanlam Life acquires ABSA Consultants and Actuaries (ACA Employee benefits) has finally gone through all of the regulatory approvals necessary to be concluded. The deal was first announced in October 2017 and was expected to be consluded...
Pension funds fall into a different category of your estate when you die and any value of the fund at time of death or death benefit amount in your pension fund can not be bequeathed to anyone as with other assets. The unfortunate thing about a death benefit claim is that it is a very complicated process and can take a long time.
Death benefit distribution
If you are involved in one of these death benefit claims against a pension fund, be patient. You will get a lot of documents and instructions on how and what documents are required to make a successful claim. Read these documents very carefully and provide ALL of the information and documentation they ask for. Any missing or partially completed document will make the process longer, so get everything together exactly as it is requested, make copies and deliver the documents to the pension fund administrators offices and get a proof of delivery signed, you may need this.
The main reason for the lengthy process before proceeds are distributed, is the onus being on the trustees to take care of the deceased’s dependents, even if those distributions are contrary to the wishes of the deceased. The intention of Section 37C of the pension funds act is to protect dependants, even over the clear wishes of the member. The section of the act strives to ensure that no one who was financially dependent on the member is left without support.
Pension funds in your estate must be distributed to your dependents or those who relied on you as a breadwinner on your death, this is a legal obligation of the trustees of your estate and could be dependents or nominees.
The Act defines dependants as spouses, children, anyone proven to have been financially dependent on the member at the time of their death, anyone entitled to maintenance, as well as anyone who may in the future have become financially dependent on the member.
A nominee is any party (natural person, trust or legal entity) whose details the member provided to the retirement fund in writing indicating that they should be considered by the trustees for a possible allocation of the death benefit. Examples would be one or more dependants, or a person who is not a dependant, such as a friend of
The trustees are required in terms of the act, to conduct an investigation into each dependants financial circumstances, find all of the dependents and then make the decision on the apportionmet of the death benefit. The act allows the trustees 12 months to complete this process but there are circumstances which could delay the process, like the determination of the cause of death in unnatural circumstances. This further requires the trustees to ensure that no nbeneficiary had anything to do with the death of the member. Completion of Police investigations can take some time.
Pension funds are also not accessible to creditors and cannot be attached. of course there are always exceptions to the rule but here we are assuming that you have not purposefully tried to hide any of your assets in a pension fund. The only creditor that has the ability to access pension funds is the receiver of revenue. Apart from that, your dependents have sole entitlement to the funds in your pension fund.
Here is a complete list of Ombudsman in South Africa which will help with anything from Banking and pension payment issues to banking, sectional title, credit and even vehicle related issues. When to contact the Ombudsman. (below are a few examples)
What is an OImbudsman? An Ombudsman is an independent, impartial person with authority and responsibility to receive, investigate or informally address complaints.
A. If you are dissatisfied with the service or explanations you have been given to your queries and are sure that someone is not being entirely honest with you.
B. If the claimed amount or the policy amount differ substantially from your payout and you do not understand the fees/disbursements or other charges on the statement.
C. If you have used all of the internal processes to attempt to resolve your complaint/query and are still dissatisfied or it still remains unresolved.
- With banking problems: the Ombudsman for Banking Services is Reena Steyn.
- Sharecall: 0860 800 900
- Telephone: 011 712 1800
- Fax: 011 483 3212
- Post: PO Box 87056, Houghton, 2041
- Email: firstname.lastname@example.org
- Website: http://www.obssa.co.za
- With COMMUNITY SCHEME-RELATED problems: The Community Schemes Ombud Service is a statutory dispute-resolution service for owners and residents of community schemes, including sectional title schemes, share block companies, homeowners’ associations and schemes for retired persons. The chief ombuds are Advocate Seeing Letele.
- Telephone: 010 593 0533
- Fax: 010 590 6154
- Post: 63 Wierda Road East, Wierda Valley, Sandton, 2196
- Email: email@example.com
- Website: http://csos.org.za
- With CONSUMER-RELATED problems: The National Consumer Commissioner is Ebrahim Mohamed.
- Toll-free: 0860 003 600
- Telephone:012 428 7000
- Fax: 086 758 4990
- Post: PO Box 36628, Menlo Park, 0102
- Email: Complaints@thencc.org.za
- Website: http://www.thencc.gov.za
- The Consumer Goods and Services Ombud Is Advocate Neville Melville. This is a Voluntary dispute-resolution scheme that has jurisdiction only over retailers, wholesalers and manufacturers that have agreed to subscribe to the consumer goods and services industry Code of Conduct.
- Sharecall: 0860 000 272
- Fax:086 206 1999
- Post: PO Box 3815,Randburg, 2125
- Email: firstname.lastname@example.org
- Website: http://www.cgso.org.za
- With Credit Transaction problems: the credit Ombud is Nicky-Lala-Mohan.
- MaxiCall: 0861 662 837
- Telephone: 077 781 6431
- Fax: 086 674 7414
- Post: PO box 805, Pinegowrie, 2123
- Email: email@example.com
- With Debit Counselling problems: The national credit regulator also deals with disputes that are not resolved by the credit ombud. The chief executive officer is Nomsa Motshegare.
- With Financial advice problems: the ombud for Financial Services Providers is Noluntu Bam.
- Telephone: 012 470 9080 or 012 762 5000
- Fax: 086 764 1422 or 012 348 3447
- Post: Sussex Office Park, 473 Lynnwood Road,Lynnwood, 0081
- Email: firstname.lastname@example.org
- Website: http://www.faisombud.co.za
- With Investment problems, The financial Service Conduct Authority (FSCA) Formerly FSB which regulates the financial services industry. Commissioner: Ms. Katherine Lee Gibson
- Contact Centre: 0800 20 37 22
- Switchboard: +27 12 428 8000
- Post: PO Box 35655, Menlo Park, 0102
- Email: email@example.com
- Website: http://www.fsca.co.za
- Anonymous Fraud & Ethics: firstname.lastname@example.org
- With Life Assurance problems: The ombudsman for Long-term insurance is Judge Ron Mclaren.
- Sharecall: 0860 662 837
- Telephone:021 657 5000
- Fax:021 674 0951
- Post:Private Bag X45, Claremont, 7735
- Email: email@example.com
- Website: http://www.ombud.co.za
- With Medical Scheme problems; The Council For Medical Schemes is a Statutory body that supervises medical schemes. The acting registrar of Medical Schemes is Dr Sipho Kabane.
- Maxicall: 0861 123 267
- Fax: 012 4307644 ( inquires) or 086 673 2466 ( complaints)
- Email: firstname.lastname@example.org
- Post: Private Bag X34,Hatfield, 0028
- Website: http://www.medicalschemes.com
- With Motor Vehicle problems: The Motor Industry Ombudsman is an independent institution that resolves disputes between the motor and related industries and their customers. The ombudsman is Johan van Vreden.
- MaxiCall: 0861 164 672
- Fax:086 630 6141
- Post: Suite 156, Private Bag x025, Lynnwood Ridge, 0040
- Email: Info@miosa.co.za
- Website: http://www.miosa.co.za
- With Retirement Fund problems: The Pension Funds Adjudicator Is Muvhango Lukhaimane.
- Telephone: 012 748 4000 OR 012 346 1738
- Fax: 086 693 7472
- Post: PO Box 580, Menlyn, 0063
- Email: email@example.com
- Website: http://www.pfa.org.za
- With Short-Term Insurance problems: The Ombudsman For Short-term Insurance is Advocate Deanne Wood.
- With Tax Problems: The Tax Ombud is Judge Bernard The Tax Ombud Can help you to resolve administrative and procedural problems with the South African Revenue Service.
- Sharecall: 0800 662 837
- Telephone: 012 431 9105
- Fax: 012 452 5013
- Post: PO Box 12314, Hatfiled, 0028
- Email: firstname.lastname@example.org
- Website: http://www.taxombud.gov.za
- Whistelblowing and anti corruption
- 086 000 5050 (from South Africa)
- +27 31 308 0600 (international)
- Email us: email@example.com
- Website: www.whistleblowing.co.za
- Government anti corruption
- Whatsapp: 072 013 5569
- SMS Callme to: 44 666
- Tel: 0800 023 456
- Website: www.corruptionwatch.org
- Report Corruption link
- South African Council for Educators – For students and educators regarding any type of abuse or complaint in the education sector
- Tel: 012 663 9517
- Website with National contacts: https://www.sace.org.za
The Rand is one of the most tradable and most liquid currencies in the world., let us not forget this. The Worlds financial markets are highly sophistacated finncial systems and when we consider that SA debt is denominated in ZAR and not in US$, it makes ZAR vulnerable to SA specific factors.
It has become a South African past time to value our country and comment on it’s stability by what the exchange rate is on the day. South Africa makes up such a tiny part of the Global financial system with our economy coming in at less than 1% of the global economy. This on it’s own would indicate that any major fluctuations in the USD ZAR excahnge rate would be asd a result of factors in the Global economy as opposed to the local economy. There is no denying that we have some challenges which our Government needs to attend to, but the affect of these factors on our exchange rate may not be as enormous as some think.
What are the factors that influence Rand Volatilty?
Global Macro economic factors have a major affect on ZAR volatility. US$ volatility is far more likely to have an effect on the Rand than load shedding for example. When there is global risk aversion, emerging markets will suffer and the ZAR is first to affected.
Commodity prices can have a profound affect on the ZAR. South Africa is a nett exporter of commodities and when commodity prices rise, like they have in recent times, our goods are cheaper and customers would likely increase order volumes to takle advantage of the lower prices.
Purchasing power parity PPP compares the buying power of currencies against a basket of goods and many have the Rand pegged as undervalued based on the PPP Index. Lets take for example a Global btrand like McDonalds, PPP would take the cost of a Big Mac in each country and look at the price differential. This Index is actually known as the Big Mac Index. To learn more about the theory, measurement and application of the PPP index click “Purchasing power parity” above for the Investopedia info. FYI, the Big Mac Index currently has the Rand undervalued by around 60%.
Will the Rand rebound to a more equal PPP level?
In the financial markets anything is possible with political and financial will but the local economy, World economy and local factors do not seem to support this.
Like any other investment, it is the lkong term view that one needs to take into account when deciding what position to take. Trying to time the markets is a mistake s o many make to their detriment and is more akin to gambling than investing. The long term view on ZAR would indicate that staying the course with a longer term view is the answer.
Tese are abservations made through reading investment news from various sources and is not financial advice. Please feel free to disagree, agree or simply comment with your own opinion.
What is a credit score?
We have all seen the ads with the two guys sitting on the couch watching TV and discussing credit scores.
Your credit score is an indicator of how much of a risk any lender will have to take by lending you money or providing you with finance for any goods or services. It is determined by how well you manage your debt by making the required payments at the required intervals. It also takes into account any debit orders that may have been returned by your bank for insufficient funds. Basically, it is essential that you manage your finances and meet your contractual obligations in order to achieve a good credit score.
Your credit Score is something that you really need to take care of. It affects your ability not only to get credit, but the interest rate you are charged on credit agreements. Having a very Good credit score can make a significant difference to the cost of an item you buy on credit, and the longer the credit period, the greater the affect. Many employers will check a prospective employee’s credit score to get an idea of how disciplined you are with money or any other reason they may have.
With this in mind, a very good credit score can work in your favour by enabling you to get sub-prime rates on certain items like cars and home loans. A 1/2 percent difference on a large sum over many years can amount to many hundreds of thousands being saved by guarding your credit record.
Is it legal for employers to check your credit score?
The NCA (National credit act) allows employers to check a prospective employees credit rating if they are applying for a position which requires the prospect to handle money/finances or honesty. This it seems is however being abused where many employers are checking credit ratings for almost every type of position.
Here again, looking after your credit score could mean the difference between getting a job and being side-lined. This on it’s own is a good enough incentive to pay special attention to your credit score.
Debt management will most certainly affect your credit score in that you will be paying less than the recommended amount of the loan agreements. Be very careful when you elect to go into debt management and try as far as possible to renegotiate with your creditors personally before electing for debt management.
Remember that the longer you stretch out your repayments, the more it is going to cost you in fees and interest and any future loans you take out will be at a premium rate, sometimes in excess of 10% or even 15% above prime. The reason for this is that you are now a credit risk. When you enter a debt management program, a debt counsellor will sit with you to determine the extent of your debt. It is important to be 100% honest with your debt counsellor, including any debts that may not be to a financial institution, but to friends, family or other lenders. The debt counsellor will take the total sum of all of your debt, the total of your income less your absolute minimum living expenses and come up with a repayment program that is on a reduced repayment basis with each creditor. In some cases and where it is possible, a single credit facility is established covering all of your debt, paying off the individual creditors and then making a single payment over a longer period.
There are many ways to skin a cat asd the saying goes and you would be well advised to be honest with yourself when assessing your debt. If you have a one account facility, an access bond or the ability to consolidate your debt, you should consider this as an option. The real question becomes, can you be disciplined enough to manage the single account and not get into any further debt until your position has improved and you have paid down your consolidated debt.
The most important factor to consider is to take your credit score very seriously. Once you have a low score, it is extremely difficult to get it back up again.
Use these loan and investment calculators to see what effect making incresed payments on loans
South Africa has a unique retirement industry where the creation of a viable black middle class was a top priority after 1994.
The Government made unsecured lending a priority to encourage employed black people to access finance and start building an asset base. Before 1994 black people were not allowed to own property, worked lower paying jobs and were underpaid for work. This resulted in an essentially poor black class which was not able accumulate wealth and transfer wealth from one generation to another.
Like most things when first adopted, there are many unintended consequences. BEE, then BBBEE are excellent examples. These were meant to transfer skills from the old regime to the new black middle class, but instead, resulted in the creation of a rich Tenderpreneur class. These people often had no intention of doing any work but had Government connections which enabled them to be awarded Government tenders. They would partner with a company that had the requisite skills to do the work through a tender specific company that met the BEE/BBBEE requirements, and would then step aside, take a cut of the project value and move on to the next tender.
There was no transfer of skills and only a few extremely fortunate few made an enormous amount of money for doing nothing.
Then there are the ministers, their family and friends who would be paid to help companies be granted tenders even though they did not come in at the best price or skills.
A lot of these types of corrupt transactions are being ventilated in the Zondo commission and one would hope that the corruption will be exposed, and the perpetrators suitably punished.
The end result of this (as a generalization) was a middle class that like to show its wealth or in many cases perceived wealth. Many awfully expensive cars, jewelry and brand names like Louis Vuitton started appearing in townships around the country. This need to show one’s wealth often lead to the car a person drove being a lot more expensive than their home.
The retirement problem
A culture of savings has not been nurtured and in many cases people are of the opinion that the Government is going to provide for them The reality of course is quite different. The South African Government simply does not have money to pay any meaningful retirement amount which will result in continued poverty and perhaps a worse poverty than before.
The SA Government has nurtured a culture of entitlement, giving land, homes and other benefits to help shore up their voter popularity but what it is really doing, is driving people further into poverty and hopelessness.
Unlike many first World countries which have significant resources through effective tax collection and tax growth, SA has squandered it’s wealth and resources on corruption and cronyism with no sign of this behavior coming to an end.
In some parts of the World like The Netherlands, where the Government provides Euro 1000 approx to every person when they turn 65 years old and company contributions to retirement cater for over 80% of their income prior to retirement. Sadly, there are only a few examples of well planned retirement saving by Government on behalf of their citizens.
Where does this leave South Africans
This is an excellent question. Many people with means have left the country believing there is no future under an ANC Government evidenced by the massive reduction in the number of super rich in South Africa. Over the past 10 years, 4000 of those with net assets in excess of $1 000 000 have left the country and of those, 500 left in 2019. This is a tragedy of epic proportions. South Africa needs these rich people to invest in businesses in the country that created jobs, yet the ANC is not creating an environment where they feel they and their investments are safe and are likely to grow and prosper.
All too often the problems are looked at from a black (poor) and white (rich) perspective which is really not going to solve any issue, it is just an easy way to blame a system broken by the ANC on the white population.
No doubt the white people left in South Africa had many benefits and these are not to be waved aside, they were very real benefits from an education system, to ownership, travel and anything else you care to mention, but making all of the ills created by a black elite the problems of white South Africans will end badly. Create opportunity for all, don’t steal would be a good place to start.
The retirement reality
The culture of spending, easy access to finance and displays of wealth have left the countries poor in a tragic position. There is still around 30% unemployment and not enough money to look after everyone in a dignified way.
Without a job how are people meant to save for retirement?
These problems seem to be getting worse not better and only one thing is for sure. “You are on your own, the Government does not have the money to offer you a dignified retirement.”
These are the ramblings of a Proud South African Small Businessman who does not want to leave the land of my birth, my parents birth, my grandparents birth and my great great grandparents birth.
I had such great hope for our country in 1994 and then we Got to 2008.
Updated November 2020
Link to FAIS database has been updated.
Many of South Africa’s pension fund Administrators hold large sums of money (In excess of R20 Billion) in preservation funds from members who have not claimed their benefits and according to the act these unclaimed benefits mustl be distributed to the member or his beneficiaries.
Each fund administrator has a different process to determine who has any unclaimed benefits and it is very wise to check with the fund administrators if there are any funds owing to you as an employee or as a beneficiary. If you have a spouse/parent/relative who left the country or died, there may be funds owing to him/her or the beneficiaries and it is well worth checking.
Please ensure that you follow the steps below to determine the fund administrators of your fund before going any further and be careful who you give your personal details to.
It is extremely important that you follow the correct procedure and compile the correct documents (see green text below) to facilitate the process.
The process to follow.
- Check which fund administrators are responsible for the administration of your fund by searching for the fund name in the search box provided in the blue strip above.
- Once you have determined who the fund administrators are, use one of the following links to make a claim for unclaimed benefits.
- If your fund administrators link does not appear below you will need to contact them directly. This means that we have not been able to find a website that allows members to request unclaimed benefit information.
if your are a fund administrator or have any additional links/forms to provide please contact Pensionfund.co.za directly through the contact form provided.
If you think you may be a beneficiary under a policy you should contact your life assurance company with as much detail as possible. Useful information would include the policy contract document, the identity document of the claimant, bank details of the claimant, a death certificate (in the event of the death of a life assured)
We are assembling a comprehensive list of contacts for unclaimed benefit applications and will be updating this post as soon as we have additional links to offer.
FSB (Now the FAIS) unclaimed benefit search (This is a general search which will return all results for a specific fund or surname to page through)
Mineworkers Provident fund lists of names who have unclaimed benefits (broken into 4 lists alphabetically)
Sanlam Staff and beneficiary list who are eligible for unclaimed benefits (Sanlam staff only noy funds administered)
Unclaimed pension fund benefits amount to a whole lot of money which is sitting in the coffers of the Insurance companies awaiting distribution and you could be one of the lucky ones who is able to collect.
Here is the process to follow in order to make a claim for unlaimed benefits.
See the screen grab below for the information you will need to make the queries.
If you or anyone in your family has been with a few different companies over the years and contributions to a pension or retirement fund were made, it is well worth using the FSB’s unclaimed benefit search to see if any benefits are owing.
The worrying thing about the fact that there are R millions of unclaimed benefits is that it appears very little effort is going into attempting to find these beneficiaries or the beneficiaries of their estates.
In most cases, the owner of the benefit has died and the company does not know how or where to contact the family members. The families of these policy owners are legally entitled to this money.
The search of the unclaimed pension benefits database is a simple search which can either be dione by fund name or by beneficiary name. I suggest that use the simplest form of the unclaimed benefit search by simply entering the surname and scrolling through the list as the Initial convention used in the database is not uniform, some are displayed as G.C or G.C. or GC, you get the idea.
UPDATED November 2020
Search the FSCA Unclaimed pension benefits database.
You are able to search for your own unclaimed benefits, as well as a family member or friend that has given you permission to search on their behalf.
Below is a creen grad showing the information required to do the search on the database.
If you do find unclaimed pension benefits from any fund, the search results will display the fund name, the contact details(in most cases) and the person to contact.
If the pension benefits show a company that you are not aware of familiar with, give them a call anyway, you never know, there may be a significant amount of money that you or the family are legally entitled to in the form of unclaimed pension benefits.
Unclaimed benefits are estimated to be in the R billions and will likely be forfeited to some fund or other under the Governments control after a defined number of years. There is much debate about what should happen with these unclaimed benefits and in light of the many discussion documents and proposals around the use of pension funds ho help restart the economy, you can imagine the temptation to get their hands on this enormous amount of money.
Perhaps it is a viable option for The ANC to use some of the much older unclaimed benefits and then to put some sort of contingency fund in place to cover a percentage of what may be clkaimed based on the past 10 years experience of tracking down relatives of those with unclaimed benefits.
We hear from the State that they are going to be spending huge amounts of money bailing out State owned enterprises, are going to spend on roads, housing and social upliftment programs.
We hear demands from unions on unsustainable wage increases and threats to shut down the economy if their demands are not met. Shutting down the economy is akin to putting some of those protesting out of work! Do the Unions really care about workers or is it just that subscription fee that they all pay to finance the Union leaders lifestyles? In my opinion, the Unions need to be put on notice by Government. Demand what is unsustainable or unaffordable and the Unions will be out of business, see how they react to that.
These are just a few examples of demands from people that the SA government has got to deal with but no one seems to ask the question, “where is the money going to come from”.
The Government gets money from one source, and that source is taxpayers and the taxpayer numbers are reducing at an alarming rate, not only due to lost jobs as a result of Covid19 which saw about 3 million job losses over the past 6 months, but as a result of high net worth individuals leaving the country, companies losing money and not paying as much tax. These are just some of the reasons that the tax base is diminishing and the governement needs to do everything in its power to make big earners and company decision makers feel secure in south africa. Unless these people feel safe and feel that there is a stable future that will allow them to grow and prosper, they will not spend money. It is all about profit and there are many other coutries and regions around the World offering them a better chance of making money!
Where does Government get it’s money?
Government gets it’s money from Taxes.
If they don’t have enough money, they have to borrow it or increase taxes. If the Government borrows the money, they have to repay it and the worse the economic outlook becomes, the more expensive those borrowings become.
So what does the South African Government do? They take a look at your savings as an easy, interest free way to get their hands on money for this planned expenditure. That is, your retirement savings to be exact. There is a proposal to implement something they called “prescribed assets” which effectively allows the Government access to your retirement savings to fund infrastructure projects and other government projects.
This speech made by Margaret Thatcher in 1983 tells it like it is and we would all be well advised to listen to it and pay attention to what is going in South Africa.
I ask you, would you invest in a State Run Project?
Of course you wouldn’t, they have a history of losing billions of Rands on everything they touch due to corruption and incompetence.
If however, these projects were run by the Private sector the answer may be different.
The reality is that approximately 3 million people account for 97% of the tax paid in South Africa. Is this sustainable? Unlikely in my opinion.
We need taxpayers, it is as simple as that. We don’t need millions of non performers in Government who are over paid and not accountable for the value they add. If a person does not make money or add measurable value against what salary they earn in the public sector, their jobs are in Danger. In the public sector, you get a job, put your feet up, produce little and get increases every year above inflation. THIS IS SIMPLY GOING TO PUT THE COUNTRY OUT OF BUSINESS so to speak.
These public “servants” do pay tax but they waste more than they contribute. Rather use this money to promote sustainable small to medium enterprises which will create new jobs and hence new taxpayers.
Encourage the Private Sector to grow their businesses
Unions in particular seem to have this self defeating attitude where they demand more than they are worth or is affordable which inevitably results in job losses. They then blame everyone but themselves for this phenomenon. It seems a failry simple strategy where you instill fear in your members at the possibility fo them losing theit jobs to get them to keep paying you instead of performing well, helping the company grow and becoming valuable workers that add value.
Adding value is key and every employee should ask themselves how they justify their salaries. What is the value that you are adding and is it commensurate with your salary. Do you have the knowledge, skills and ability to perform better? If you do, then you are likely to be a promotable employee or an employee gets a bonus.
I have never understood the attitude that employees seem to have to bonuses, particularly in the Government sector. A bonus is something that you are given if you have done something extraordinary above and beyond what is required of you to justify your salary. Demanding a bonus when you have performed what you are paid to do is just a crazy notion. Do something to deserve a bonus and enjoy the sense of achievement when deciding what to do with your bonus! Too many people factor their bonmuses/13th cheques into their earnings… what is the point of a bonus then, just tell people they will earn 8.4% more every month.
A bonus should be something unexpected, something you have earned by putting in a little more effort. This also makes you more visible to management when bonus discussions come up, putting you in a good light when promotions come around. Please people, do more than what is expected, if you expect more than what you earn.
I am not an economist, I am just a guy who has been in small business for about 30 years or so and cannot understand the demands and entitlement of employees in the Government sector today. This goes for entitlement in the private sector as well, but is certainly not at the same level as the Gornment sector.
Retirement annuities are designed to supplement retirement benefits from company pension funds or for self employed people wanting to plan for their retirement.
For people in their own businesses where earnings may be irregular, retirement annuities are an excellent way to plan for the future in that the contributions can easily be changed or stopped altogether for a period of time.
These funds restrict access to funds that have been invested until you reach the age of 55 if you are not incapacitated for any reason, however, as voluntary contributions, the tax benefits are available from the first payment. In the event that you are unable to work due to illness or injury on a permanent basis, withdrawals from the fund are allowed under the age of 55.
In general, retirement annuities are invested in unit trusts from some of the worlds top performing funds.
On retirement you are able to take a lump sum payment equal to 1/3 of the capital amount, the remaining 2/3 to be used to purchase income products or living annuities as an example. Discuss this aspect with your retirement planner and ensure that you fully understand the types of investments and realistic income you could expect from these funds.
Recent legislation has removed the compulsory retirement age of 70 and now you are able to remain part of the fund after the age of 70, until death. Upon your death, the funds would become part of your estate and distributed to your beneficiaries.
The Financial services industry is becoming increasingly regulated and offers low risk investments regulated by the SA Government to ensure low risk guaranteed returns.
What are the tax benefits of an RA?
RA’s offer investors significant tax benefits which includes a maximum of 27.5% of you pre tax income subject to a maximum R350 000 per annum. In addition to this, no income tax or capital gain tax is charged on the investment returns within an RA.
At retirement, investors are permitted to withdraw up to one-third of which the first R500 000 of the total withdrawal is tax-free.
How many Retirement Annuities can I invest in?
There are many different Retirement annuities offered by all of the insurance and investment companies. You are entitled to invest in as many RA’s as you wish but subject to the maximums listed above.
When can I access retirement annuity money?
Under normal conditions you are able to access your money after age 55. There are exceptions which will include ill health or emigration.
What happens to my RA when I retire and stop contributing?
When you retire, you are able to draw 1/3 of the capital and the remaing amount MUST be used to purchase in income product like an annuity or pension to provide you with a monthly income. It is important to note that the maximum 1/3 cash withdrawal is optional and the withdrawal is taxable if the amount exceeds R500 000.
What happens to my RA money when I die?
Money in an RA do not form part of your estate and therefore cannot be bequesthed to beneficiaries in your will. Money in an RA would not form part of fee calculation for executors.
Transferring Retirement Annuities when you emigrate
Financial emigration does not mean you have to give up your South African Passport. It is possible to transfer retirement annuities, pension or provident funds to a foreign country for emigration purposes before you turn 55. Some of the reason people are financially emigrating are the following.
Access to your funds
Access the full after-tax cash value of your RA and other retiremernt investments.
Protecting the value of your money
Provide a Hedge against Rand depreciation and economic outlook.
Invest in more stable foreign currencies.
There are many benefits to transferring your savings offshore and this is less complicated than one would expect. Each South African has an annual R1 million discretionary allowance (without SARS approval) they are able to transfer out of the country and a further R10 million (With SARS approval).
For more information on Tax emigration, read the following informative article.
As a follow up to the article that indicates the increased level of complaints against pension fund administrators and the current pension fund adjudicators record of dealing with these cases, we thought you would like to know a little about the person who adjudicates the cases brought before the pension fund adjudicators office.
Pension Fund Adjudicator
Antoinette Muvhango Lukhaimane
Education: Highest appears to be an MBA from Wits business school in 2013 but holds an LLB, LLM and various other legal/finance qualifications.
She has been in Government since 2002, of which most of her time was spent at the pension fund adjudicators office, including a stint as deputy pension fund adjudicator for a year prior to her appointment in 2013.
Read her full CV on parliaments website: CV of Pension fund adjudicator – Antoinette Muvhango Lukhaimane>>
Take a look at Antoinette Muvhango Lukhaimane Linkedin profile >>
Or, take a look at her short resume on the PFA website >>
It is always a good idea to know a little about the person who will be taking on your case. We hope you find the information useful and of course, once you have read this, follow the instructions on the “how to lodge a formal complaint against your pension fund administrator” page and make her life easier when it comes to making a decision.
If you lay out your case well, provide her with the correspondence (in date order) and any evidence, emails etc showing what you have done and how you have attempted to deal with your query, you will be well rewarded.
The pension fund adjudicator is a very busy person and your job is to make her life easier, not leave her having to wade through mountains of paper. Prepare it, collate it, and put it in a file. Make a copy of the whole file for your records and provide it to her, well marked with your name, contact info and any other relevent information. Make notes and a summary of all the times you contacted by phone, email or post along with reference numbers, times and names of people you spoke to.
I hope you understand how important it is to provide comprehensive documentation with time lines for a good chance of success. Be prepared!!
Deputy Pension Funds Adjudicator
Advocate Matome Thulare
Advocate Matome Thulare has been appointed as the Deputy Pension Funds Adjudicator for a period of three years, effective from 1 January 2020. Advocate Thulare spent many years at the FSB (Financial services board) Now known as Financial Sector Conduct Authority.
He attended Tshiawelo High School in Limpopo Province, he studied for a BA degree in Criminal Justice at University of Venda which he attained in 1995. In 1998 he attained a BA (Hons) degree in Employment Relations at the then Rand Afrikaans University. In 2007 he attained a Bachelor of Laws (LLB) at the University of South Africa.
He also possesses post-graduate legal qualifications in the fields of Master of Laws (General); Master of Laws (Labour Law) and Master of Laws (LLM) Consumer Protection.
You are in good hands with Advocate Thulare, don’t be bullied by Big Business, you have rights.