SANLAM STAFF UMBRELLA PROVIDENT AND PENSION FUND AND RELATED GROUP INSURANCE
agenda PART A - Pension and Provident Fund PART B - Group Life PART C - Critical Illness Insurance PART D - IncomeCare PART E - Family Cover PART F - Summary
Part A: Operation of the Funds CONTRIBUTIONS MEMBERS INVESTMENT EMPLOYER INCOME COST FOR DEATH BENEFIT INVESTMENT PORTFOLIOS RETIREMENT DEATH WITHDRAWAL
Provident Fund And Pension Fund Provident Fund Pension Fund Employer contributions Member contributions 27½ % tax deductible Retirement Benefits Cash Death Benefits Lump sum plus fund Fund value value
Contribution Rates (% x TGP) ⧁ Pension Fund = Member contribution: Default: 7.5% ⧁ May opt for a lower level: 4%; 4.5%; 5%; 5.5%; 6%; 6.5% or 7% ⧁ Minimum = 4% ⧁ Maximum = 7.5% ⧁ Provident Fund: Employer contribution: Default : 10% ⧁ May opt for a lower or higher level: 6%; 6.5%; 7%; 7.5%; 8%; 8.5%; 9%; 9.5%; 10%; 10.5%; 11%; 11.5%; 12%; 12.5%; 13%; 13.5%; 14%; 14.5%; 15%; 15.5%; 16%; 16.5%; 17%; 17.5%; 18%; 18.5%; 19%; 19.5% or 20% ⧁ Minimum = 6% ⧁ Maximum = 20%
Investments ⧁ Individual investment choice ⧁ Default = Lifestage option ⧁ If lifestage option selected – no other portfolios may be chosen
Fixed Contribution Funds VARIABLE FIXED ? ? ? + Member Employer Pension Fund Provident Fund Contributions + Investment return = BENEFITS
Death Benefits ⧁ Lump sum insured cover (Provident Fund) ⧁ Plus ⧁ Full Fund value (Pension and Provident Fund)
Death Benefits ― (Continue) CONDITIONS FOR LUMP SUM INSURED COVER ⧁ Qualify for Default / Maximum: 3x TGP ⧁ Can select lower level: Minimum: 0.5x TGP Future increases/decreases ⧁ Increase within 3 months of marriage or birth/adoption of child: - For members younger than 50 years: 1x TGP without proof of good health - For members 50 years and older: Any increase subject to proof of good health ⧁ Annually during flex event: - Increases subject to proof of good health - Decreases (subject to minimum: 0.5x TGP)
Death Benefits ― (Continue) COST OF LUMP SUM INSURED COVER RATE PER R1 000 AGE BAND COVER < 25 years R0.185 26 – 30 years R0.138 31 – 35 years R0.144 36 – 40 years R0.161 41 – 45 years R0.168 46 – 55 years R0.193 > 56 years R0.241
Death Benefits ― (Continue) FORMULA FOR CALCULATING SAVING/EXTRA COST Amount by which benefit is decreased/increased x Rate = Saving / extra cost 1 000 ⧁ Saving = more saving for retirement benefits ⧁ Extra cost = less saving for retirement benefits Combined proof free limit (Fund and Group Life) R15 million
Part B: Group Life Assurance DEATH COVER ON OWN LIFE ⧁ Default: 1x TGP ⧁ Minimum: 0.5x TGP ⧁ Maximum: 3x TGP ⧁ Cost: 24.4c per month, per R1 000 cover Future increases/decreases ⧁ At appointment - Cover can be increased with proof of good health – Maximum: 3x TGP ⧁ Annually during flex event - Cover can be decreased – Minimum: 0.5x TGP - Cover can be increased with proof of good health - Maximum: 3x TGP
Death Cover – On Spouse’s Life On Spouse’s Life (optional) : 0, 0.5 or 1x TGP Proof free limit: R1.4 million Cost: 23.6c per month, per R1 000 cover Options to take out cover at ⧁ Permanent appointment (without proof of good health) ⧁ Within three months of marriage (without proof of good health) ⧁ Registration of a de facto spouse (with proof of good health) ⧁ Annually during flex event (with proof of good health) Option to reduce cover ⧁ Annually during flex event
Disability Cover Lump sum disability cover: - Equal to Group Life Death cover of 1x TGP; plus - 50% of Group Life Death cover in excess of 1x TGP Example: If life cover = 2x TGP Disability cover = 1.5x TGP Payable after a waiting period of six months Definition of disability is total and permanent disability for own or similar occupation.
Option To Continue With Life Cover At Retirement / Retrenchment CONDITIONS - Retrenchment after 15 years uninterrupted service with the employer. - For five years but not after the age of 65 years. - Amount = 5% of cover at termination of service for each completed year of service (Maximum: 100%)
Conversion Option - At termination of membership life cover of member and spouse may be converted to individual life assurance with Sanlam without having to prove good health. - Amount = 5% of cover at termination of service for each completed year of service (Maximum: 100%)
Part C – Critical Illness Insurance MEMBERSHIP COMPULSORY Cover = 0.5 or 1x TGP Maximum cover = R1.5 million Industry limit = R7.5 million Payable if employee is diagnosed with a critical illness Standard Comprehensive Number of 10 24 illnesses No limit on number of Claims Once only claims, but only one per illness Rate R0.28 per R1 000 R0.373 per R1 000
Part D – Incomecare DISABILITY INCOME BENEFIT ⧁ Three month waiting period ⧁ Definition of disability: Total disability for suitable occupation BASIC BENEFIT ⧁ 75% of the first R120 000 of the annual TGP; plus ⧁ 60% of the next R360 000 of annual TGP; plus ⧁ 50% of the annual TGP in excess of R480 000; plus ⧁ 6% of TGP member contribution to Pension Fund; plus ⧁ 8.56% of TGP employer contribution to Provident Fund. TOP-UP BENEFIT ⧁ Permanent disabilities which member is unlikely to recover 25% of TGP – 6% of TGP (Maximum: R67 000) -
Disability Income Benefit (Continue) ⧁ Retirement benefits continue until death or attainment of retirement date, whichever occurs first ⧁ Increase is determined annually ⧁ Minimum increase: 2% ⧁ Cost: 0.885% of TGP (after tax deduction)
Part E – Family Cover Benefits payable at death and premiums Option 1 Option 2 Additional (Standard Cover) (Increased cover) parent cover Family member on whom benefit is applicable ⧁ Basic benefit R29 000 R58 000 - - Principal member - - Qualifying Spouse R29 000 R58 000 R29 000 R58 000 - - Qualifying child aged 14 and over - R15 950 R31 900 - Qualifying child aged 6 and over but younger than 14 - R10 000 R20 000 - Qualifying child younger than age 6 and/or still-born child ⧁ Additional spouses (ex-spouse in R29 000 R58 000 - case of divorce) ⧁ Legal Parents or parents-in-law R 7 500 R15 000 R10 000 Monthly premiums ⧁ Basic benefit R 8.75 R17.50 - ⧁ Additional spouse R 4.00 per spouse R 8.00 per spouse - ⧁ Parent cover R22.50 per parent R45.00 per parent R40.00 per parent
Membership ⧁ Parents and additional spouses : Optional ⧁ All employees have once-off option to join at permanent appointment ⧁ Membership ceases at: - Resignation - Retirement - Dissolution of the scheme
conclusion
Contributions And Benefits Of Funds And Related Insurance Group Life Pension Provident Family Trauma Disability Fund Fund Cover Member Spouse R8.75 – Basic Contribution/ 4% - 7.5% 6% - 20% 24.4c / 23.6c / 28c / 37.3c 0.885% x TGP Costs R1 000 R1 000 R1 000 (after tax) R22.50 per (after tax) (after tax) (after tax) parent R40.00 for additional parent cover R4.00 – Additional spouse (after tax) Death Fund value Fund value; Maximum: 3x 0, 0.5 or - Disabled Sliding scale benefits plus assured TGP (tax free) 1x TGP employees (tax free) benefit of (tax free) 3 months income to maximum: estates 3x TGP Disability - - Lump sum: - - Income benefit benefits Equal to Basic: death benefit 75% sliding scale x (tax free) TGP and where applicable Top-up:25% x TGP
Contributions And Benefits Of Funds And Insurance (Continue) Group Life Pension Provident Family Trauma Disability Fund Fund Cover Member Spouse Trauma - - - - 0.5, 1 x TGP - - benefits Maximum: R1.5 million (tax free) Resignation/ Fund Fund value Conversion option for Conversion Conversion Conversion Retrenchment/ value Conversion death cover option option option Retirement option for (Continuation-if qualify) Sanlam Sky benefits death cover
Death Benefits – Nomination Forms ⧁ Very important – Benefits do not form part of estate ⧁ Always better to complete a nomination form, available on the intranet ⧁ Used as a guideline by the trustees ⧁ Trustees may override nomination (i.e. not the same as the nominee of a policy) ⧁ Three nomination forms: - Sanlam Staff Umbrella Pension Fund and Provident Fund - Group Life Scheme : Own life - Group Life Scheme : Spouse
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