Death Benefits

Withdrawal:

A withdrawal benefit becomes payable when you leave the service of your employer, either due to resignation, retrenchment or dismissal, before you reach normal retirement age.

 

What benefit will I receive?

If you leave the Scheme, you will automatically become a Preserver member of the Scheme after 120 days, unless you actively elect another option. This is the Scheme’s Default Preservation strategy that is in line with the Default Regulations.

Preserver members don’t make contributions to the Fund and are not covered for death or disability benefits. You will remain invested in the same portfolio you were invested in when you were an active member, unless you make a selection from the available portfolios in the Fund.

 

Inter-school Transfers: Should you transfer to another School which participates in the ISASA Pension Scheme Part I, it is compulsory that the full value of your Accumulated Credit as at the date of transfer be transferred to the new School’s account. You will continue to enjoy unbroken membership in the Scheme.

Should you transfer to a school participating in Part I (Defined Benefit Scheme) of the Pension Scheme, your Accumulated Credit will be used to purchase past service.

 

Payment Options

If you decide to take your withdrawal benefit (and not to become a Paid-Up/Preserver member) you have 4 payment options:

  • You may transfer the benefit to a retirement annuity (RA)
  • You may transfer to a pension preservation fund
  • You may transfer the benefit to your new employer’s fund
  • You may take the benefit in cash and pay tax

After reaching early retirement age (within 10 years from normal retirement), but before normal retirement age, you have the option to resign instead of taking early retirement and to transfer your accumulated credit to a preservation fund.

 

Please remember

It will be wise to preserve your money until you retire. A cash withdrawal may seem attractive at this stage, but will influence your retirement plans negatively in the future. Tax affairs must be up to date at all times as any benefit pay-out due from the Scheme is subject to tax clearance from SARS.

Retirement:

Normal Retirement

The School determines the normal retirement age (as stated in the school’s special rules).

 

What benefit will I receive?

You will receive your accumulated credit. Accumulated credit consists of your and the employer’s retirement contributions, less costs, plus investment returns.

 

Payment Options

You may elect to take up to 1/3rd of the total value of your pension as a cash lump sum and 2/3rds must be used to purchase an annuity (Life or Living) of your choice from a registered insurer. Remember lump sum benefits taken in cash are taxed.

In terms of the law the Fund also offers an annuity strategy. It is important to note that this is not an automatic default arrangement and members will have to make an active selection/choice to Opt-In to this strategy if they want to make use of one of the two pension options offered by the Fund.

The Fund offers a Life and Living annuity option and members will receive quotations for both when they are 5 years from retirement. Members will be given retirement benefit counselling at least 3 months prior to their normal retirement age.

 

Obtain financial advice

It is advisable that you obtain financial advice from an accredited financial advisor. To find a financial advisor you can go to the Financial Planning Institute at www.fpi.co.za

Or call Old Mutual’s toll free number 0860 388 873

Early Retirement

With agreement from your employer you may retire early at any age within 10 years of your   normal retirement date.

 

What benefit will I receive?

You will receive your accumulated credit. Accumulated credit consists of your and the employer’s retirement contributions, less costs, plus investment returns.

 

Payment Options

You may elect to take up to 1/3rd of the total value of your pension as a cash lump sum and 2/3rds must be used to purchase an annuity (Life or Living) of your choice from a registered insurer. Remember lump sum benefits taken in cash are taxed.

In terms of the law the Fund also offers an annuity strategy. It is important to note that this is not an automatic default arrangement and members will have to make an active selection/choice to Opt-In to this strategy if they want to make use of one of the two pension options offered by the Fund.

The Fund offers a Life and Living annuity option and members will receive quotations for both when they are 5 years from retirement. Members will be given retirement benefit counselling at least 3 months prior to their normal retirement age.

Late Retirement

With consent from the employer you may retire after normal retirement age.

 

What benefit will I receive?

You will receive your accumulated credit. Accumulated credit consists of your and the employer’s retirement contributions, less costs, plus investment returns.

 

Payment Options

You may elect to take up to 1/3rd of the total value of your pension as a cash lump sum and 2/3rds must be used to purchase an annuity (Life or Living) of your choice from a registered insurer. Remember lump sum benefits taken in cash are taxed.

In terms of the law the Fund also offers an annuity strategy. It is important to note that this is not an automatic default arrangement and members will have to make an active selection/choice to Opt-In to this strategy if they want to make use of one of the two pension options offered by the Fund.

The Fund offers a Life and Living annuity option and members will receive quotations for both when they are 5 years from retirement. Members will be given retirement benefit counselling at least 3 months prior to their normal retirement age.

Death:

To qualify for this benefit the employer and the Scheme must have been notified of your death.

 

What benefit will my dependents receive?

Your employer will elect what percentage they pay to the Insurer. Based on this percentage your dependants will receive a taxable lump sum that is based on a multiple of your annual pensionable salary and your age at date of death PLUS a refund of the member’s accumulated credit.

Please refer to the Summary of Benefits Poster for the correct multiples table.

 

Remember to complete a Beneficiary Nomination Form

Although the Trustees will follow your wishes in terms of your nomination of beneficiary form as far as possible, the final decision of who will receive the death benefit rests with the Trustees, who are required in terms of the Pension Funds Act, to ensure that all dependants are considered.

You are reminded to update the nomination of beneficiary forms regularly to prevent any unnecessary delays in the distribution of death benefits.

 

Please remember

You need to make sure that the amount of cover for death and disability provided through the Scheme is right for you and your family. If you feel it may not be adequate, you may want to buy additional cover outside the Scheme.

Payment of death benefits may take a long time. Make sure that your spouse will have access to funds during this period.  Speak to an approved financial advisor to assist you with your financial planning.

Tax affairs must be up to date at all times as any lump sum benefit pay-out due from the Scheme is subject to tax clearance from SARS.

 

Death After Retirement

To qualify for this benefit the employer and the Scheme must have been notified of the death.

The benefit will depend on the pension you purchased either from the Scheme or from a registered Insurer

Disability:

To qualify for a disability benefit you must be unable to perform your own or similar occupations. Medical evidence to support your claim must be submitted. Benefits are subject to acceptance by the insurer in terms of the policies held in the names of the employers outside the Scheme.

Benefits are subject to acceptance by the Insurer in terms of the policies held in the names of the employers outside the Scheme.

 

What benefit will I receive?

You will receive 87% (75% of pensionable salary plus 12% Employer Waiver) of monthly pensionable salary subject to a maximum monthly benefit of R165 000, paid after a 3 month waiting period.

Disability benefit ceases at the earliest of:

  • normal retirement age
  • death of a member
  • date insurer rules disability has ceased.

 

Income benefits will increase by CPI per annum during disablement.

The benefit may not exceed the member’s total Guaranteed Package after the deduction of tax at the start of the waiting period.

 

Please remember

Whilst you are in receipt of a disability benefit you will remain a full contributing member of the Scheme, which means that you continue to be covered for death in service benefits and will continue to accrue pension benefits.

Income benefits may be reduced or suspended by the Insurer if a member is considered recovered or capable of earning an income.