FundsAtWork 1 A5 Book Bro Nov.indd /12/15 10:43 AM

Transcription

1 FundsAtWork 1

2 Published by FundsAtWork Umbrella and preservation funds 3

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4 contents The gap - not to be ignored 8 FundsAtWork - partnering with financial advisers and employers to fill the gap 12 Retirement benefits - placing people among the top 6% 20 Insurance benefits - facing the challenges 26 Lifestyle benefits - living life in style 40 Business benefits - making life easier 44 Benefits of FundsAtWork - a final word 48 7

5 The gap - not to be ignored chapter 01: 8

6 South Africa is a nation of diversity, with over 50 million people and a wide variety of cultures, languages and religious beliefs. Each day, people go about their lives, working, spending time with loved ones, writing their own life story filled with events and memories that give meaning to their lives. Meanwhile research reveals a less idyllic picture of the reality that many South Africans are facing. On the whole South Africans are grossly under insured and their retirement savings are appallingly low. Retirement savings gap South Africans don t save - only 6% of the formerly employed population will retire comfortably without assistance from the government or family and friends. 9

7 Longevity, which will see many individuals outlive their pension provisions, a lack of proper financial planning and medical costs which have outstripped inflation increases, are the major reasons why retirees will take home much less than their final salary. The average salary replacement percentage for most people is well below the targeted level of 75% and higher, which means the average person will have significantly less than 75% of their final working salary to live on at retirement. Not only do South Africans save insufficiently for retirement but they also have a culture of not preserving their retirement savings when they change employers. This has a huge impact on their ability to retire. Insurance gap The insurance gap refers to how much insurance a person has relative to what they actually need should an active income earner in the household die or become disabled. Studies indicate that South Africans are underinsured by an estimated 60% for life and disability cover. Employer sponsored benefits are often the only source of retirement savings and insurance cover that an individual has. It is therefore crucial that the correct base for retirement and insurance planning is put in place by the employer. 10

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9 FundsAtWork - partnering with financial advisers and employers to fill the gap 12

10 chapter 02: Fortunately for South Africans, many small to medium size employers recognise the advantages of offering retirement and insurance benefits to their employees. Not only do these employers attract and retain effective and qualified staff, but offering these benefits also results in lower staff turnover and significant cost savings, over and above the tax benefits. But, every tale has a twist. Unfortunately offering retirement and insurance benefits to employees can be costly and complex. Employee retirement and insurance planning - clear, simple and safe The FundsAtWork umbrella and preservation funds are built on the philosophy of transparency, flexibility, value for money and ease of use to provide appropriate retirement, insurance, lifestyle and business benefits. 13

11 value for money retirement benefits transparency business benefits insurance benefits ease of use lifestyle benefits flexibility 14

12 The philosophy of transparency, flexibility, ease of use and value for money is core to the design of our FundsAtWork umbrella and preservation funds. FundsAtWork recognises that individuals have different needs. Therefore we have designed four options offering retirement savings and insurance benefits to cater for the diverse needs of individuals. From a cost effective entry level option with no flexibility, to the option for the most financially sophisticated individual requiring wide choice, FundsAtWork is committed to helping close the retirement savings and insurance gaps. 15

13 FundsAtWork s four options Founder is the most cost effective option with no employee flexibility and limited employer flexibility. It forms the basis of any retirement and insurance plan and aims to meet the needs of those who want a low cost solution, with guarantees included in the investment performance. Founder aims to provide benefits similar to the proposed National Social Security Fund. Narrator follows Momentum s dynamic lifestage house view on retirement and insurance benefits, which are packaged together in an integrated and automated manner, taking into account the retirement and insurance needs of an average individual at any point in time. Narrator allows employees retirement, death and disability benefits to adjust automatically as the typical person moves through the different stages in their life and as their needs change at certain ages, making the most of the contributions paid. This is a first for the South African market and a new concept for the industry. 216

14 Provider offers a range of inflation targeted portfolios and is appropriate for members and employers who have more complex requirements based on their company structure or needs. Flexibility is enhanced with additional choice of contribution and insurance benefit levels. Provider allows members to invest in more than one portfolio at a time, except for the Lifestage portfolios. Entrepreneur is the boutique or specialist option for those who have the need to structure specific and unique investment profiles using a selection of unit trusts and Momentum portfolios, and who require flexibility on their insurance benefits. Entrepreneur allows members to diversify their personal investment strategy and allows members to invest in more than one portfolio at a time, except for the Lifestage portfolios. Each option has been designed based on our belief that retirement savings and insurance benefits are equally important recognising people s needs while writing a specific chapter of their lives. Employers can now offer individuals the right solution to help them write a better ending to their life story. 17

15 Summary of investment portfolios and insurance benefits per option Founder Narrator Provider Entrepreneur Guaranteed portfolio Metropolitan MultiManager Smooth Growth (Global) * trustee default portfolio Dynamic Lifestage portfolio Momentum Lifestages Investment portfolios Inflation targeted (CPI) portfolios Momentum Enhanced Factor 3 (CPI+3%) Momentum Enhanced Factor 4 (CPI+4%) Momentum Enhanced Factor 5 (CPI+5%) Momentum Enhanced Factor 6 (CPI+6%) Momentum Enhanced Factor 7 (CPI+7%) Dynamic Lifestage portfolio Momentum Lifestages Guaranteed portfolios Metropolitan MultiManager Smooth Growth (Global) * Momentum InflationGro Momentum Secure Bonus Boutique / Specialist portfolios All Provider portfolios Momentum Money Market Momentum MultiManager Money Market Momentum StableGro Momentum Balanced Momentum MultiManager Balanced Momentum Shari ah Momentum Super Nation Momentum MultiManager Aggressive Momentum Passive Lifestages Metropolitan Lifestage portfolios Momentum Bond Momentum Inflation Guaranteed Our simplified product design helps members and employers control their own destinies. Momentum Inflation Plus Momentum Capital Plus Momentum Gold Bullion Over 300 unit trusts * A market value adjuster * applies in certain instances 18

16 Founder Narrator Provider Entrepreneur Standard Insurance Benefits Group life cover Lump sum disability Permanent health insurance Capital income provider Other Insurance Benefits (no flexing) Dread disease Family Protector BASE Life Eventing Group life cover (compulsory) Permanent health insurance (compulsory) Family Protector BASE Group life cover GLA Lump sum disability PTD Permanent health insurance PHI Capital income provider CIP Spouse s and children s annuity SAC Temporary income disability TTD Insurance benefits Life Eventing Group life cover Lump sum disability Capital income provider FlexiCovers Group life cover Lump sum disability benefit Permanent health insurance Capital income provider Spouse s and children s annuity Other Insurance Benefits (no flexing) Temporary income disability Dread disease Accidental death Spouse s life cover Family Protector BASE and PLUS Life Eventing Group life cover Lump sum disability Capital income provider FlexiCovers Group life cover Lump sum disability benefit Permanent health insurance Capital income provider Spouse s and children s annuity Other Insurance Benefits (no flexing) Temporary income disability Dread disease Accidental death Spouse s life cover Family Protector BASE and PLUS 19

17 Retirement benefits- placing people among the top 6% 20

18 chapter 03: Currently 94% of South Africans reaching retirement age have no other choice but to continue working, depend on government assistance or rely financially on family or friends. FundsAtWork s diverse range of investment portfolios is carefully designed to assist members to achieve their investment objectives and to bridge the gap in their retirement savings. The four options, Founder through to Entrepreneur, provide for simple to complex requirements. Preserving with FundsAtWork Changing jobs every two to three years has almost become the norm in South Africa. As South Africa s poor savings track record confirms, many people cash in on their retirement savings when they change employment. To encourage employees to preserve their retirement savings when they change employers, we can automatically preserve their retirement savings in the FundsAtWork preservation funds even if they give no instruction as to what they want to do with them. This means that the member will not lose out on market performance as they are not out of the market at any time. Their choice of option and investment portfolios will remain the same as with the umbrella fund, with the choice to move to any other of the four options at any time. Members joining the FundsAtWork preservation fund from another fund may choose the initial option. All members have the freedom to change product options at any time. 21

19 Asset Consulting Working together with the financial adviser, FundsAtWork Asset Consulting focuses on retirement savings at member level and provides proactive asset consulting services to FundsAtWork clients. Its flagship service includes asset modelling projections, which continually assesses whether a member is likely to meet their retirement savings objective. By providing members with information about what they can expect financially at retirement, they are able to take action in an attempt to improve their outcome. We realise that not everyone can afford to contribute to their retirement at the recommended levels but there are other choices available to them, such as making sure that they invest in the most appropriate portfolio. FundsAtWork Asset Consulting is available to qualifying schemes in the Founder, Narrator and Provider options at various levels of flexibility at no additional charge, and can assist in providing specialist solutions in the Entrepreneur option at an additional cost. 22

20 Investment philosophies meeting investment needs People s needs change, depending on their personal circumstances, their age and where they might find themselves on their life path. This is also true for their investment needs. Some may pursue an inflation-beating strategy while others simply want to follow a lifestage approach. FundsAtWork provides a wide variety of investment portfolios which are carefully selected to meet the investment objectives and diverse needs of our members. 23

21 Founder Individuals with the need to have absolute capital protection while targeting inflation-beating returns over the long term (periods in excess of 5 years) will find themselves being comfortable with Founder. Narrator Narrator follows Momentum s house view on investments and is suitable for members who want to change their investment portfolio according to their particular lifestage. It automatically moves the assets to the appropriate portfolio as the member progresses on their life journey. Provider The Provider option investment portfolios are suitable for individuals who are seeking a range of investment portfolios targeting inflation plus 3% to inflation plus 7%, a lifestage solution to their retirement planning needs or guaranteed portfolios. Entrepreneur The investment portfolios offered under Entrepreneur are suitable for members wishing to structure a specific and unique investment profile using a selection of unit trusts and Momentum portfolios. Please refer to the list of investment portfolios on page 18 or visit our website 24

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23 Insurance benefits - facing the challenges 26

24 chapter 04: Many people think they do not need death, disability or dread disease cover. They re young, their children are young and they re all in good health. But reality is that people die unexpectedly every day and even the healthiest person can get sick. Smart insurance planning ensures that emotional struggles aren t complicated by financial hardship. FundsAtWork protecting families FundsAtWork assists members to plan for these unplanned events through insurance benefits specifically for death, disability and dread disease. Insurance benefits are available on all four product options and also as stand alone benefits without the retirement savings benefits. In addition to standard insurance benefits FundsAtWork also offers FlexiCovers and Life Eventing on certain product options. 27

25 Members can increase or decrease (flex) their group life and disability cover to suit their personal circumstances, often without having to supply medical requirements. FundsAtWork s Provider and Entrepreneur options offer access to FlexiCovers. 28

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27 Life Eventing is the alternative to traditional insurance benefits. It considers an individual s insurance needs within certain age periods and automatically increases or decreases the cover accordingly. 30

28 Life cover The purpose of life cover is to replace an individual s salary when they die. The life cover required by a specific earner depends on current personal income and debt levels. Group life cover Through FundsAtWork an employer can offer employees either standard or FlexiCovers group life cover or Life Eventing. The benefit is expressed as a multiple of the member s annual salary or as a flat Rand amount and will be paid to the member s dependants as a lump sum. Spouse s and children s pension On the death of the member a monthly pension will be paid to the spouse and / or children. The spouse s pension is payable for the lifetime of the spouse and the children s pension is payable until the child turns 21 years. Disability cover The South African economy loses billions every year due to illness and disability. Approximately 6% of the total South African population suffers from a form of disability. The SMME (small, medium and micro enterprises) sector, which employs some 60% of the country s workforce, is clearly at high risk. Disability insurance benefits protect the individual against the potentially severe financial implications of becoming disabled. Rehabilitation and return to work Research shows that people who become disabled want to return to work and to be reintegrated into society. Momentum s industry leading rehabilitation and case management approach helps people to make the necessary adjustments to their environment and lifestyle and to return to employment as soon as possible. Early notification is key to the success of this process. 31

29 FundsAtWork offers the following disability cover: Permanent health insurance (PHI) provides a replacement monthly income in the event that the member is no longer able to work. The benefit is paid until normal retirement age for permanent disabilities. Traditional PHI cover provides disabled employees with a 75% salary replacement. Imagine having to survive on 25% less of your income. Employers have the option to choose a salary replacement benefit of up to 100% throughout, or 100% in the initial period and 75% thereafter. Employers can also select an initial period of 12 or 24 months and can choose the disability definitions in order to manage the cost of the benefit. Lump sum disability (PTD) provides a lump sum payment to a member when they suffer a permanent disability. The employee can use the lump sum payment to adjust their lifestyle or to invest to provide an additional income, or both. Capital income provider (CIP) combines the features of both the PHI and PTD benefits. It provides a monthly income in the event of disability for a maximum of two years after which a lump sum is paid to the member. Temporary income disability (TTD) is designed with the cost conscious employer in mind. An income is only paid on disability after expiry of the waiting period for a limited period of time, after which all payments cease. The benefit pays a monthly income for employees to adjust their lifestyle and possibly find alternative working arrangements. The benefit term is 6 to 24 months. TTD can also be structured to provide cover during the waiting periods of PHI and PTD. 32

30 Dread disease cover A new trend is emerging: companies are losing skilled staff to disability occurrences at an even younger age due to stress-related causes. Many physical diseases such as heart attacks, strokes, hypertension and diabetes find their origin from mental diseases such as stress and depression. It is estimated that these diseases kill more than 600 South Africans daily. FundsAtWork offers three dread disease benefit options on the Founder, Provider and Entrepreneur options: Dread disease Essential benefit Inclusive benefit Inclusive stand-alone benefit The benefit is payable for essential conditions only and members must have group life cover Essential conditions Cancer Heart attack / surgery Kidney failure Major organ transplant Paralysis Stroke Blindness The benefit is payable for essential and inclusive conditions and members must have group life cover Essential conditions and Inclusive conditions Loss of limbs / hearing / speech Coma Severe burns Multiple sclerosis Motor neuron disease Parkinson s disease Benign brain tumour Alzheimer s disease Poliomyelitis Aplastic anaemia Severe ulcerative colitis Severe Crohn s disease Primary pulmonary hypertension Acquiring of HIV from blood transfusion Occupationally acquired HIV The benefit is payable for essential and inclusive conditions and is available without corresponding group life cover Essential conditions and Inclusive conditions 33

31 FundsAtWork Family Protector Family funeral, education and health waiver benefits Approximately one quarter of all individuals have some form of insurance, which helps surviving household members defray some funeral expenses. However, an equal percentage of households borrow money to pay for the funeral. Family Protector provides basic payouts to cover funeral expenses, meet educational needs and provide continuation of medical aid cover in the case of a member s death or disability. Members of the Provider and Entrepreneur options have more flexibility and can increase the amount of cover they enjoy. 34

32 Have these benefits to qualify for the BASE or PLUS option Retirement benefits Retirement and disability Retirement and death benefits Retirement, disability and death benefits Benefits the member will get at no additional cost as members of the Founder, Narrator, Provider and Entrepreneur option Funeral benefit BASE R per main member and spouse(s) R5 000 per child 8 family members covered (the member, up to 2 spouses and 4 children) Funeral benefit BASE + Health premium (medical aid contribution) waiver BASE (on disability) pays medical aid contributions if a member is disabled only for members on Momentum Health contributions are waived for 12 months Funeral benefit BASE + Health premium (medical aid contribution) waiver BASE (on death) + Education benefit BASE an amount is made available for children s education if a member dies once off lump sum paymentof R per child with a maximum of 5 children up to 5 children covered money administered by FNB Trust Funeral benefit BASE + Health premium (medical aid contribution) waiver BASE (on disability + death) + Education benefit BASE Family Protector PLUS Benefits available to members on the Provider and Entrepreneur options by paying a small additional premium Funeral benefit PLUS (FlexiCovers) The member can: add children add cover for member and spouse(s) add cover for children add parents / parents -in-law Funeral benefit PLUS + Health premium (medical aid contribution) waiver PLUS (on disability) (FlexiCovers) The member can: add years add another medical aid Funeral benefit PLUS + Health premium (medical aid contribution) waiver PLUS (on death) + Education benefit PLUS (FlexiCovers) The member can: add children add cover Funeral benefit PLUS + Health premium (medical aid contribution) waiver PLUS (on disability + death) + Education benefit PLUS (FlexiCovers) 35

33 Momentum Health Income Protector The Momentum Health Income Protector provides a business continuity solution for employers if an employee falls ill, undergo a serious surgical procedure, childbirth or an extended hospital stay of 21 days and longer. To get the full story on the HIP product offering please contact your financial adviser or send an to HIPqueries@momentumhealth. co.za. Preservation fund insurance benefits Any member, under the age of 55, transferring from the FundsAtWork umbrella to the FundsAtWork preservation fund, may take up a similar individual policy with Momentum Myriad at a competitive price for a sum assured less than or equal to the amount of cover they enjoyed under the umbrella fund, with no underwriting. The insurance products offered are: Lump sum life cover Lump sum disability cover Income disability cover Comprehensive dread disease / trauma lump sum benefits Members under the FundsAtWork preservation fund will receive the funeral benefit BASE under the Family Protector at no additional cost if they move from the FundsAtWork umbrella fund. 36

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35 Family Protector BASE Benefits the member will get at no additional cost as members of the Founder, Narrator, Provider and Entrepreneur options in the FundsAtWork preservation fund Funeral benefit BASE R per main member and spouse(s) R5 000 per child 8 family members covered (the member, up to 2 spouses and 4 children) Members who take out individual insurance policies with Momentum Myriad in addition to the funeral benefit BASE will be entitled to the education benefit base and health premium waiver BASE under the Family Protector at no additional cost if they move from the FundsAtWork umbrella fund. Individual insurance policy with Momentum Myriad Funeral benefit BASE + Health premium (medical aid contribution) waiver BASE (on death) + Education benefit BASE an amount is made available for children s education if a member dies lump sum payment of R with a maximum of R per child up to 5 children covered money administered by FNB Trust For a summary of the insurance benefits under the four options please refer to the table on p18 38

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37 Lifestyle benefits - living life in style chapter 05: 40

38 FundsAtWork recognises the impact stress has on both the employee and employer and offers a solution to help promote wellness. Wellness with Multiply FundsAtWork members can now enjoy the journey to wellness with Multiply, Momentum s wellness programme. No matter how far they have travelled on their journey to wellness, Multiply can help them go further, in a fun and rewarding way. Whether they need information to help them take the first step, tools to make the journey that much easier, or incentives to keep them motivated. Multiply endorses a healthy mind in a healthy body by offering gym memberships, fabulous books, exciting movies, exotic getaways, stunning jewellery and accessories. These are just some of the many offerings Multiply members enjoy - at significantly discounted prices. Multiply has joined forces with a range of providers in wellness, leisure and travel, to offer people everything they need for a healthy body and a healthy mind. 41

39 Home loans With the employer s agreement, individual members under the FundsAtWork umbrella fund have access to pension backed guaranteed home loan facilities at preferential rates. These pension backed home loans are intended to assist those who would not otherwise have access to home loan funding. The loan must be used to purchase or renovate a primary residence. Smart accounts FNB Smart Accounts are available to all members who withdraw from the umbrella fund and do not have active bank accounts. Once the account has been opened, the withdrawal benefit will be paid into the new account. The member can go to any FNB branch with their identity document to activate the account (proof of residency will be required for balances greater than R25 000). The FNB Smart Account is a card based transactional account. Some of the additional benefits offered are: R1 000 free funeral benefit as long as the account remains active. Free cellphone, telephone and online banking. Free transactions ie balance enquiries, purchasing pre-paid airtime, payments, inter-account transfers, mini-statements, purchasing Lotto tickets etc. Free incontact FNB s messaging service that sends customers an sms or every time a transaction above R100 takes place on their account. Members may select their own pricing option when they activate their account. 42

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41 Business benefits - making life easier Benefits online 44 06: 44 chapter The Internet has fundamentally changed the banking industry in South Africa by giving people more immediate control over the management of their finances. Self service technology in South Africa is fast becoming the norm with more than 5,3 million Internet users. FundsAtWork s online employer portal gives employers and financial advisers immediate control over the management of member

42 data and benefits. The system makes it easier for employers to perform transactions and saves time without compromising sound governance. Queries and reports are at the push of a button. Members and employers have instant online access to member benefits. The system is web-based therefore our clients do not have to be office bound in order to access the system. They can quickly and securely add and update member information online, eliminating the need for paper-based tasks and reducing turnaround times of general data maintenance at month-end and claims stage. When members leave their employer they have the option to transfer their retirement savings to the FundsAtWork preservation fund. The auto preserve facility on the employer portal supports full asset portability to the complementary FundsAtWork preservation fund. The funds are automatically preserved with a realtime transaction and no losses are incurred as with manual transactions. All the FundsAtWork web functionality is available to preservation fund members. 45 4ofo

43 FundsAtWork s web applications give members, employers and financial advisers instant access to information as well as the ability to transact electronically. Educating and communicating is key 46

44 External educators Our external educators visit the employer after the installation of the scheme. They train the employer on how to use the online employer portal and take members through their benefits and product options helping them to understand retirement and insurance planning better. Web applications Members can make changes to their personal details, change their beneficiaries, view their benefit statements and the amount in their retirement savings account as well as make changes to their investment portfolios and insurance benefits. Cellphone and notification Momentum communicates with its members via sms or , where we have their contact details, on certain events such as their monthly retirement savings account balance, investment portfolio switches and claims assistance. Members can subscribe to receive more communication via the website at fundsatwork or by calling the FundsAtWork client contact centre on and have the option to unsubscribe from these messages. 47

45 Benefits of FundsAtWork - a final word 48

46 FundsAtWork offers simplified retirement vehicles and insurance benefits. Our reduced costs through economies of scale allow smaller employers to provide employee benefits that are normally only available to members of large retirement funds. Sound governance through access to professional lawyers, investment experts and accountants who support the trustees, sponsored by Momentum as the administrator. chapter 07:: Employers can focus on what they re good at while we take on the administrative complexities and burdensome trustee duties. FundsAtWork offers flexibility and allows for different member and employer needs in terms of insurance benefits, investment portfolios, contributions and levels of flexibility. Members have direct online access to fund information and benefit statements informing them of their retirement savings account balance, insurance benefits and investment portfolios. Employers can perform all reconciliation transactions electronically via our employer portal, much like internet banking. When a member exits the umbrella funds their retirement savings can be preserved in the corresponding FundsAtWork preservation fund. All fees and charges are clearly set out so that there are no hidden costs. FundsAtWork provides pertinent real-time information to educate members, which ultimately leads to them being more financially aware and making better informed decisions. 49

47 Reviews 2011 PMR awards Silver Arrow Award for group pension and provident funds Golden Arrow Award for group life / risk products Golden Arrow Award for investment products 2010 FIA award Employee Benefits Product Supplier of the Year 2010 PMR awards Silver Arrow Award for investment products Bronze Arrow Award for group pension and provident funds Bronze Arrow Award for group life / risk products 2009 PMR award Bronze Award for employee benefits administrators and consultants 2008 PMR awards Golden Arrow Award for group life and disability benefits Silver Arrow Award for investment products Bronze Arrow Award for group pension and provident funds FundsAtWork has received PMR awards consistently since

48 268 West Avenue Centurion 0157 PO Box 7400 Centurion 0046 Tel Fax Website Momentum is an authorised financial services and credit provider 52