SANLAM STAFF UMBRELLA PROVIDENT AND PENSION FUND AND RELATED GROUP INSURANCE
SANLAM STAFF UMBRELLA
PROVIDENT AND PENSION FUND
AND RELATED GROUP INSURANCE
agenda
PART A - Pension and Provident Fund
PART B - Group Life
PART C - Critical Illness Insurance
PART D - IncomeCare
PART E - Family Cover
PART F - Summary
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INVESTMENT
INCOME
RETIREMENT DEATH WITHDRAWAL
COST FOR DEATH
BENEFIT
MEMBERS
CONTRIBUTIONS
INVESTMENT PORTFOLIOS
Part A: Operation of the Funds
EMPLOYER
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Provident Fund And Pension Fund
Provident Fund Pension Fund
Employer contributions Member contributions
27½ % tax deductible
Retirement Benefits
Cash
Death Benefits
Lump sum plus fund
value
Fund value
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Contribution Rates (% x TGP)
⧁ Pension Fund = Member contribution: Default: 7.5%
⧁ May opt for a lower level: 4%; 4.5%; 5%; 5.5%; 6%; 6.5% or 7%
⧁ Minimum = 4%
⧁ Maximum = 7.5%
⧁ Provident Fund: Employer contribution: Default : 10%
⧁ May opt for a lower or higher level: 6%; 6.5%; 7%; 7.5%; 8%;
8.5%; 9%; 9.5%; 10%; 10.5%; 11%; 11.5%; 12%; 12.5%; 13%;
13.5%; 14%; 14.5%; 15%; 15.5%; 16%; 16.5%; 17%; 17.5%;
18%; 18.5%; 19%; 19.5% or 20%
⧁ Minimum = 6%
⧁ Maximum = 20%
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Investments
⧁ Individual investment choice
⧁ Default = Lifestage option
⧁ If lifestage option selected – no other portfolios may be chosen
Fixed Contribution Funds
+
VARIABLE
?
Member
Pension Fund
Employer
Provident Fund
FIXED
Contributions + Investment return = BENEFITS
??
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Death Benefits
⧁ Lump sum insured cover (Provident Fund)
⧁ Plus
⧁ Full Fund value (Pension and Provident Fund)
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Death Benefits ― (Continue)
CONDITIONS FOR LUMP SUM INSURED COVER
⧁ Qualify for Default / Maximum: 3x TGP
⧁ Can select lower level: Minimum: 0.5x TGP
Future increases/decreases
⧁ Increase within 3 months of marriage or birth/adoption of child:
- For members younger than 50 years: 1x TGP without proof of good
health
- For members 50 years and older: Any increase subject to proof of good
health
⧁ Annually during flex event:
- Increases subject to proof of good health
- Decreases (subject to minimum: 0.5x TGP)
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Death Benefits ― (Continue)
AGE BANDRATE PER R1 000
COVER
< 25 years R0.185
26 – 30 years R0.138
31 – 35 years R0.144
36 – 40 years R0.161
41 – 45 years R0.168
46 – 55 years R0.193
> 56 years R0.241
COST OF LUMP SUM INSURED COVER
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FORMULA FOR CALCULATING SAVING/EXTRA COST
Amount by which benefit is decreased/increased x Rate = Saving / extra cost
1 000
⧁ Saving = more saving for retirement benefits
⧁ Extra cost = less saving for retirement benefits
Combined proof free limit (Fund and Group Life) R15 million
Death Benefits ― (Continue)
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Part B: Group Life Assurance
DEATH COVER ON OWN LIFE
⧁ Default: 1x TGP
⧁ Minimum: 0.5x TGP
⧁ Maximum: 3x TGP
⧁ Cost: 24.4c per month, per R1 000 cover
Future increases/decreases
⧁ At appointment
- Cover can be increased with proof of good health – Maximum: 3x TGP
⧁ Annually during flex event
- Cover can be decreased – Minimum: 0.5x TGP
- Cover can be increased with proof of good health - Maximum: 3x TGP
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Death Cover – On Spouse’s Life
On Spouse’s Life (optional) : 0, 0.5 or 1x TGP
Proof free limit: R1.4 million
Cost: 23.6c per month, per R1 000 cover
Options to take out cover at
⧁ Permanent appointment (without proof of good health)
⧁ Within three months of marriage (without proof of good health)
⧁ Registration of a de facto spouse (with proof of good health)
⧁ Annually during flex event (with proof of good health)
Option to reduce cover
⧁ Annually during flex event
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Disability Cover
Lump sum disability cover:
- Equal to Group Life Death cover of 1x TGP; plus
- 50% of Group Life Death cover in excess of 1x TGP
Example:
If life cover = 2x TGP
Disability cover = 1.5x TGP
Payable after a waiting period of six months
Definition of disability is total and permanent
disability for own or similar occupation.
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Option To Continue With Life Cover
At Retirement / Retrenchment
CONDITIONS
- Retrenchment after 15 years uninterrupted service with the
employer.
- For five years but not after the age of 65 years.
- Amount = 5% of cover at termination of service for
each completed year of service (Maximum: 100%)
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Conversion Option
- At termination of membership life cover of member and spouse
may be converted to individual life assurance with Sanlam
without having to prove good health.
- Amount = 5% of cover at termination of service for each
completed year of service (Maximum: 100%)
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Part C – Critical Illness Insurance
MEMBERSHIP COMPULSORY
Cover = 0.5 or 1x TGP
Maximum cover = R1.5 million
Industry limit = R7.5 million
Payable if employee is diagnosed with a critical illness
Standard Comprehensive
Number of
illnesses10 24
Claims Once only
No limit on number of
claims, but only one
per illness
Rate R0.28 per R1 000 R0.373 per R1 000
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Part D – Incomecare
DISABILITY INCOME BENEFIT
⧁ Three month waiting period
⧁ Definition of disability: Total disability for suitable occupation
BASIC BENEFIT
⧁ 75% of the first R120 000 of the annual TGP; plus
⧁ 60% of the next R360 000 of annual TGP; plus
⧁ 50% of the annual TGP in excess of R480 000; plus
⧁ 6% of TGP member contribution to Pension Fund; plus
⧁ 8.56% of TGP employer contribution to Provident Fund.
TOP-UP BENEFIT
⧁ Permanent disabilities which member is unlikely to recover
- 25% of TGP – 6% of TGP (Maximum: R67 000)
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Disability Income Benefit (Continue)
⧁ Retirement benefits continue until death or attainment
of retirement date, whichever occurs first
⧁ Increase is determined annually
⧁ Minimum increase: 2%
⧁ Cost: 0.885% of TGP (after tax deduction)
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Part E – Family Cover
Benefits payable at death and premiums
Option 1
(Standard Cover)
Option 2
(Increased cover)
Additional
parent cover
Family member on whom benefit is
applicable
⧁ Basic benefit- Principal member
- Qualifying Spouse
- Qualifying child aged 14 and over
- Qualifying child aged 6 and over
but younger than 14
- Qualifying child younger than age 6 and/or still-born child
R29 000
R29 000
R29 000
R15 950
R10 000
R58 000
R58 000
R58 000
R31 900
R20 000
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-
⧁ Additional spouses (ex-spouse in
case of divorce)
⧁ Legal Parents or parents-in-law
R29 000
R 7 500
R58 000
R15 000
-
R10 000
Monthly premiums
⧁ Basic benefit
⧁ Additional spouse
⧁ Parent cover
R 8.75
R 4.00 per spouse
R22.50 per parent
R17.50
R 8.00 per spouse
R45.00 per parent
-
-
R40.00 per parent
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Membership
⧁ Parents and additional spouses : Optional
⧁ All employees have once-off option to join at permanent
appointment
⧁ Membership ceases at:
- Resignation
- Retirement
- Dissolution of the scheme
conclusion
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Contributions And Benefits Of Funds
And Related InsurancePension
Fund
Provident
Fund
Group LifeTrauma Disability
Family
CoverMember Spouse
Contribution/
Costs
4% - 7.5% 6% - 20% 24.4c /
R1 000
(after tax)
23.6c /
R1 000
(after tax)
28c / 37.3c
R1 000
(after tax)
0.885% x TGP
(after tax)
R8.75 – Basic
R22.50 per
parent
R40.00 for
additional
parent cover
R4.00 –
Additional
spouse
(after tax)
Death
benefits
Fund value Fund value;
plus assured
benefit of
maximum:
3x TGP
Maximum: 3x
TGP (tax free)
0, 0.5 or
1x TGP
(tax free)
- Disabled
employees
3 months income to
estates
Sliding scale
(tax free)
Disability
benefits
- - Lump sum:
Equal to
death benefit
(tax free)
- - Income benefit
Basic:
75% sliding scale x
TGP and where
applicable
Top-up:25% x TGP
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Contributions And Benefits Of Funds
And Insurance (Continue)
Pension
Fund
Provident
Fund
Group LifeTrauma Disability
Family
CoverMember Spouse
Trauma
benefits
- - - - 0.5, 1 x TGP
Maximum:
R1.5 million
(tax free)
- -
Resignation/
Retrenchment/
Retirement
benefits
Fund
value
Fund value
Conversion
option for
death cover
Conversion option for
death cover(Continuation-if qualify)
Conversion
option
Conversion
option
Conversion
option
Sanlam Sky
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Death Benefits – Nomination Forms
⧁ Very important – Benefits do not form part of estate
⧁ Always better to complete a nomination form, available on the
intranet
⧁ Used as a guideline by the trustees
⧁ Trustees may override nomination (i.e. not the same as the
nominee of a policy)
⧁ Three nomination forms:
- Sanlam Staff Umbrella Pension Fund and Provident Fund
- Group Life Scheme : Own life
- Group Life Scheme : Spouse
questions
thank you