Sanlam Umbrella Fund In-Fund options. A smooth path from pre- to post-retirement

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1 Sanlam Umbrella Fund In-Fund options A smooth path from pre- to post-retirement

2 Continuous membership of the Sanlam Umbrella Fund The world of retirement is currently going through its most intense period of change ever, and the Sanlam Umbrella Fund is at the forefront of new developments. Our aim is to provide a simple, easy and convenient pre- to postretirement path, which is why our members can now stay in the Fund into retirement. The Sanlam Umbrella Fund not only makes it easy for members to grow their retirement money during their working years, but also offers great solutions to members who retire or leave their employment. Your choice of solutions The In-Fund Living Annuity: If you retire, you can draw a monthly pension from the Fund. In-Fund Preservation: If you leave your employment before you retire, you can leave your money in the Fund. Phased Retirement: If you retire, you can postpone the payment of your retirement benefit until a later date. 1

3 This means that you don t have to go through the hassle of transferring your member share to a preservation fund or to your new employer s fund, can simply continue with your existing investment strategies, providing these are on the approved trustee menu of choices don t have to exit the fund and possibly lose out in bad market conditions, don t pay any upfront fees, may withdraw your money at any stage in the future, continue to benefit from the favourable tax exemption of a retirement fund, and have time to think about your future plans. All our In-Fund Living Annuity, In-Fund Preservation and Phased Retirement members benefit from internationally competitive administration fees: Only the first R1,5m assets attract a fee of 0,1% per year, subject to a minimum fee of R25 per month exclusive of VAT, and no fees apply above this amount. 2

4 The In-Fund Living Annuity The In-Fund Living Annuity offers you a seamless transition from pre- to post-retirement, and it comes with all the flexibility of a living annuity. With the In-Fund Living Annuity, you don t need to leave the Fund when you retire and purchase an annuity (pension). Your retirement savings are used to pay you a monthly pension from the Fund. You can select a drawdown percentage of between 2,5% and 10%, if no selection is made, you will be defaulted to a drawdown rate of 5%. You can review your drawdown options annually, but you can switch your investments at any time free of charge. The In-Fund Living Annuity also offers you extremely competitive administration fees and a range of institutionally priced investment portfolios within the trustee-approved investment menu. The trustees will also monitor the sustainability of pensions, and provide guidance to help you to periodically consider the available alternatives. More benefits You can opt out at any time and transfer your entire member share to another annuity with other registered providers of such products, including purchasing a guaranteed pension from an insurance company. You can take a portion in cash, and invest the balance in selected portfolios. Your pension is paid into your bank account on the 27th of each month. If your share falls below the de minimis, you can take the full amount as a lump sum. Although current South African Income Tax legislation provides for drawdown rates between 2,5% and 17,5%, the trustees believe that a cap of 10% is necessary to ensure sustainable pensions. This is a major protection strategy to ensure that pensioners do not outlive their money, especially in these days with increased life expectancy. 3

5 In-Fund Preservation If you leave your employer, this option allows you to leave your benefit in the Fund. And you can withdraw your benefit from the Fund at any time in the future. This makes it easy for you to preserve your money as you don t have to go through the hassle of transferring your member share to a preservation fund, or to your new employer s fund. You can simply continue with your existing investment strategies and change them as your needs change. More benefits In-Fund Preservation members benefit from low administration fees. You continue to enjoy institutionally priced asset management fees, as was the case when you were an active member of the Fund. All the options that are normally available to members of preservation funds are also available to you. You can convert to the In-Fund Living Annuity, with the option to take a portion in cash, or purchase an annuity with an insurer of your choice also with the option to take a portion in cash. Phased Retirement Phased Retirement gives you the opportunity to postpone the payment of your retirement benefit to a later date than the retirement date indicated in the rules of the Fund. This option is especially suitable if you wish to pursue a second career and do not need immediate access to your retirement savings. You can also change your investment strategies as your needs change. More benefits When you wish to withdraw your money, you can convert to the In-Fund Living Annuity, with the option to take a portion in cash, or purchase an annuity with an insurer of your choice also with the option to take a portion in cash. 4

6 Investments Sanlam Umbrella Fund members have access to a range of institutionally priced investment portfolios within the trustee-approved investment menu. You can switch your investments at any time and you don t pay any investment switch fees. Available portfolios Trustee-approved default strategies Single-manager range Multimanager range External single-manager range Smoothed bonus range Index-tracking range Sanlam Lifestage Volatility Protection Strategy Passive Lifestage Strategy Sanlam Blue Lifestage Strategy SIM Balanced Fund SIM Moderate Absolute Fund SIM Cash Fund SMM 70 Portfolio SMM 50 Portfolio SMM 30 Portfolio SMM Moderate Absolute Fund SMM NUR Balanced Fund The Most Aggressive Portfolio Sanlam Accumulation Portfolio Allan Gray Global Balanced Portfolio Coronation Houseview Portfolio Investec Balanced Fund Sanlam Foord Balanced Fund Sanlam Prudential Balanced Fund Sanlam Monthly Bonus Fund Sanlam Stable Bonus Portfolio Sanlam Progressive Smooth Bonus Fund SATRIX (SWIX) Balanced Tracker Fund Applicable fees Administration fees Financial Adviser fees Investment management fees Contingency reserve account levy 0,1% per annum, excluding VAT, recovered monthly, in respect of the first R of the total investments (and nil in respect of the portion of the total investments above this threshold), subject to a minimum fee of R25 per month, excluding VAT. You and your Financial Adviser must agree upfront what fees are to be paid to him/her. An initial once-off fee of up to 0,50% (excluding VAT), PLUS An on-going fee of up to 0,75% per annum (excluding VAT). These fees are calculated and charged on a monthly basis. A list of the latest investment management fees can be obtained on the latest investment fund fact sheets. R3,00 per month, including VAT. * The fees as quoted are subject to review from time to time. 5

7 A solid choice It is strongly recommended that all Sanlam Umbrella Fund members seek advice before choosing an In-Fund option. You can contact your contracted benefit consultant, contracted financial adviser, or any other FAIS accredited financial adviser of your choice. How to secure continuous membership When you have selected the solution that suits you best: Access the relevant application form on the Retirement Fund Web. Select the appropriate option. Indicate if you have an adviser, and what the agreed fee is. Select an investment portfolio from the available line-up. Submit your application via your employer s office. If you have insured benefits within the Sanlam Umbrella Fund, you can also select the conversion option. Contact us on sanlamumbrellafund@sanlam.co.za 6

8 SCO240 6/ Strand Road, Bellville, Cape Town PO Box 1, Sanlamhof 7532, South Africa T +27 (0) Sanlam Life Insurance Limited Reg no 1998/021121/06. F +27 (0) Licensed Financial Services and Registered Credit Provider (NCRCP43). 7