PAGE 1 Supercharge your annual salary increase! Update from the Principal Officer MEMBER NEWSLETTER July 2014 It is that time of the year when your employer talks to you about a salary increase. This is an exciting time for all, as even the smallest increase prompts thinking of the possibilities of what to do with the extra cash you will have. Dear members In keeping with our aim to help you plan for a comfortable retirement, this quarter’s newsletter themed “Supercharge your annual salary increase” will provide you with some tips on achieving the retirement of your dreams. This year has seen some exciting developments, with Government proposing many changes – all aimed at improving the retirement fund industry – which will ultimately benefit you. This edition of The NestEgg also covers the latest industry and regulatory developments as well as the Fund’s investment performance for the first quarter of 2014. Be sure to look out for all Fund communication in the months ahead. Fund regards Lynn van der Merwe
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Supercharge your annual salary increase! · Supercharge your annual salary increase! Update from the Principal Officer MEMBER NEWSLETTER July 2014 It is that time of the year when
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PAGE 1
Supercharge your annual salary increase!
Update from the Principal Officer
MEMBER NEWSLETTERJuly 2014
It is that time of the year when your employer talks to you about a salary increase. This is an exciting time for all, as even the smallest increase prompts thinking of the possibilities of what to do with the extra cash you will have.
Dear members
In keeping with our aim to help you
plan for a comfortable retirement,
this quarter’s newsletter themed
“Supercharge your annual salary
increase” will provide you with some
tips on achieving the retirement of
your dreams. This year has seen
some exciting developments, with
Government proposing many
changes – all aimed at improving the
retirement fund industry – which will
ultimately benefit you.
This edition of The NestEgg also
covers the latest industry and
regulatory developments as well as
the Fund’s investment performance
for the first quarter of 2014.
Be sure to look out for all Fund
communication in the months ahead.
Fund regards
Lynn van der Merwe
PAGE 2
By all means, reward yourself for your hard work by spending a small portion of this extra money on things you enjoy, but do try to save a portion of your increase as well.
However, if you have been getting by okay, then it would be far wiser to continue living as if you’re still earning the same salary (as before your increase) and to supercharge the additional money by contributing more towards your retirement fund.
Since you are only allowed to increase your contribution rate at the start of each year when you restructure your salary package, we thought we’d let you know that you can also bump up your retirement savings by making “Additional Voluntary Contributions” (also referred to as AVCs).
• Youhavetheflexibility to save as much as you choose and this will be deducted
directly from your monthly salary via the payroll.
• Thereareno costs deducted from this amount. The full amount is allocated
directly to your fund credit.
• Itisinvestedinthesame investment portfolio as your monthly retirement
savings contributions.
• Lastly,youareabletostop this deduction at any time.
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Supercharge your annual salary increase!
Investing just a little bit extra each month could have a massive impact
on the level of income you can expect in retirement
Thismeansthatyouaresavinginacost-effectivewayand,becauseyouareinvestingintheMedia24RetirementFund,youareinvestingindirectlywithAllanGray,Coronation,Foord,Investec,SanlamandOldMutual.Inaddition,youwillbetakingadvantageoftheinstitutional fees that apply to investments, instead of the far higher fees which are related to retail products (e.g. unit trusts, retirement annuities etc.).
Forsome,retirementmaybemanyyearsaway,butinvestingjustalittlebitextraeachmonthcouldhaveamassiveimpactonthelevelof income you can expect in retirement, due to the power of compound growth (i.e. earning interest on interest).
Formoreinformationonincreasingyourretirementfundcontributions,pleasevisittheFund’swebsitebyclickinghere. The website also offers various tools, including the “RetirementProvisionCalculator”, which can help you see how much you need to save on a monthly basis towards your retirement.
After a long process the Financial Services Laws General Amendment Act, 2013 was signed into law on 16 January 2014 and brought about the following changes:
Fund operations
The non-payment of a member’s retirement fund contributions by an employer is now a criminal offence. The responsible person/s as well as the directors and others with direct involvement may be held personally responsible to face a fine of up to R10millionand/orimprisonmentforupto10years.Retirementfundsarerequiredto confirm the names of the responsible persons at the employer.
Benefits paid
Members’ or beneficiaries’ benefits may be paid to a third party if they prove that they are unable to open a bank account.
Thetaxrequiredtobedeductedorwithheldfromamember’sbenefitmaybededucted by the retirement fund from the member’s benefit.
Payment to an ex-spouse of a member is also allowed in terms of a court order in respect of the division of assets of an Islamic marriage.
A benefit older than 24 months that is not claimed by the ex-spouse of the member may be treated as an unclaimed benefit. (Similarly, a death benefit not paid to a beneficiary within 24 months may be treated as an unclaimed benefit.)
Trustees and fund management
Trustees, administrators, valuators, auditors and principal officers must inform the Registraronbecomingawareofanymatterthatcouldhaveamajornegativeeffecton the fund or members.
Registrar
The registrar, who is responsible for the regulation of retirement funds, has been given greater powers of inspection and investigation relating to retirement funds.
The Consumer Protection Act
Witheffectfrom28February2014,the
Consumer Protection Act does not apply to
mattersregulatedbytheFinancialServices
Board. It will not apply to registered retirement
fundsliketheMedia24RetirementFund.
The Protection of Personal Information Act
(PoPI)
TheProtectionofPersonalInformationAct,No.
4of2013,wasfinallygazettedon26November
2013butwillonlycomeintooperationona
date still to be determined by the President.
There will be a transitional period of one year
from the commencement date. Thereafter, the
processing of personal information will have to
conform to the Act.
PAGE 5
HISTORICAL PERFORMANCE OF THE FUND
INVESTMENT PERFORMANCE REPORT QUARTER2OF2014
PERFORMANCE SUMMARY AS AT 30 JUNE 2014
PORTFOLIO / INDEX
QUARTER YTD 1 YEAR 3 YEAR 5 YEAR DEC 2000
Growth 5.36% 9.90% 25.43% 17.17% 16.29% 15.63%
Balanced 4.71% 8.32% 19.72% 14.45% 13.69% 12.63%
Stable 3.50% 5.58% 12.17% 10.72% 10.10% 9.35%
Money Market
1.46% 2.79% 5.54% 5.54% 6.15% 7.64%
CPI 0.74% 3.89% 6.41% 5.82% 5.35% 5.88%
Click on the links below to access the following additional information:
InvestmentManagers’Outlook and Strategy Update
Website Investment Page
GlobalmarketsimprovedinJuneastheMSCIWorldIndexrose1.8%inUSdollarterms.Emergingmarketsoutperformeddevelopedmarketsbyclimbing2.7%inJuneand6.7%forthequarterindollarterms,asmeasuredbytheMSCIEmergingMarketsIndex.ThedownwardadjustmentoftheUSgrossdomesticproduct(GDP)suggestedthattheireconomyhasshrunk,even though the rate of unemployment decreased and inflation remained under control, whichallowedforUSFederalReserveBanktapering(reductioninbondpurchasesaimedatimproving the conditions for economic growth) to continue. In Europe, low inflation and the threat of deflation remain a concern.
South Africa finds itself in a stagflation environment, experiencing low growth and rising inflation,withinterestratesnearinghistoriclows.Nonetheless,thelocalmarket’sstrongperformance shows that many of South Africa’s largest companies’ earnings are driven by offshore developments, indicating a global economic recovery. The different income streams of local companies also boost South Africa’s risk profile and attractiveness for global investors.
MANAGER PERFORMANCE (GROSS RETURNS) AS AT 30 JUNE 2014
The portfolio managers who have been selected to manage the underlying asset classes have strict mandates and performance targets that are monitoredregularly.Thetablebelowreflectstheannualisedperformanceforeachassetclassandeachmanager,exceptthequarterlyreturns,which represent the actual performance.
ASSET CLASS MANAGER DATE APPOINTED
QUARTER 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
SHARES Allan Gray 01/10/2002 8.03% 32.34% 21.59% 21.83% 24.07%