OLD MUTUAL Superfund ORION MEMBER GUIDE Helping you to understand your benefits
The Orion option of the Old Mutual SuperFund offers employers comprehensive retirement and risk benefits. For details of the benefits that your employer has selected for you, please refer to your New Entrant Certificate and Annual Member Benefit Statement before reading this member guide. If you need any more information, please contact your employer or, alternatively, the Old Mutual Service Centre on 0860 20 30 40. Please note: This is not a legal document. The information in this member guide is only a summary of the Rules of Old Mutual SuperFund and the various linked insurance policies. The Rules of the Old Mutual SuperFund and the conditions in the policy contracts will apply in all cases.
Contents 1. Why you should read this member guide 2 2. Overview of how the Fund works 4 3. The benefits in more detail 8 - Retirement - Withdrawal (resignation, retrenchment, dismissal) - Death (including Family Funeral benefit) - Disability 4. Management Board (ALSO REFERRED TO AS Trustees) 18 the people who manage your retirement savings 5. KEEPING TRACK OF YOUR SAVINGS ANNUAL MEMBER 20 BENEFIT STATEMENT 6. Resolving disputes 22 7. In closing 24 8. BENEFICIARY NOMINATION FORM 26 Provision has been made at the back of this guide should you wish to make some personal NOTES 1
01 Why you should read this member guide 2
The Old Mutual SuperFund is designed to benefit you. It s really important that you understand how your Fund works and what benefits you will receive. Please read this member guide and if anything is unclear or you have any questions, please contact your employer or, alternatively, the Old Mutual Service Centre 0860 20 30 40. What does the Fund do for me? Because your employer participates in Old Mutual SuperFund, you are now a member of the Fund. What are my responsibilities as a member? Read this member guide, as well as your Annual Member Benefit Statement, to make sure that you fully understand your benefits. Keep your beneficiary nomination form up to date with any changes to your beneficiaries and give it to your employer for safekeeping. How will this member guide help me? Depending on what options your employer has selected, the Fund offers the following benefits, which could apply when you: retire from the Fund, leave the Fund (through resignation, retrenchment or dismissal), die while you are still working; or if an immediate family member dies, or are no longer able to work due to health reasons. By understanding your benefits, you will be able to plan for your financial security and retirement. You will also be able to ensure that your dependants are financially secure, should something happen to you. Most people feel that they would like more control over their financial planning. One good way to start taking control is to understand your retirement fund benefits. The next section explains in more detail how your Fund works. 3
02 Overview of how the Fund works 4
Who makes contributions to the Fund? Your Fund is called a defined contribution fund, because you and your employer contribute a fixed percentage of your salary to the Fund each month. The contributions to the Fund are equal to a decided percentage of your pensionable salary*. If your employer has decided to pay the full contribution towards the Fund, you will not contribute at all. However, if you and your employer both contribute towards the Fund, your employer will deduct your contribution from your salary. Check with your employer for how much you and your employer contribute to the Fund. * Your pensionable salary is that part of your salary used to calculate your retirement fund contributions. You can find this amount on your Annual Member Benefit Statement and New Entrant Certificate. You can also check with your employer if you re unsure about this amount. Additional Voluntary Contributions If you want to save even more towards your retirement, you or your employer can boost your Accumulated Credit by making additional voluntary contributions to the Fund. These are invested in the same way as your monthly contributions, regardless of whether you or your employer makes the additional voluntary contributions. Transfers to Old Mutual SuperFund (Orion) If you were previously a member of another retirement fund, your retirement savings in that fund can be (or may already have been) transferred to the Old Mutual SuperFund (Orion). Transfers from other funds will be added to your Accumulated Credit. Death and/or Disability cover If your employer has included this cover, additional benefits will pay out if you die or become disabled while working for your employer. Your Accumulated Credit Your Accumulated Credit consists of: your own contributions (if any), including additional voluntary contributions contributions made by your employer towards your retirement savings, including additional voluntary contributions (if any) amounts transferred from other funds (if any) investment returns less expenses, such as administration and investment fees. The benefits offered Your Accumulated Credit will be used to provide you with benefits if one of the following events occurs: Retirement (including ill-health, early and late retirement) Withdrawal (resignation, retrenchment and dismissal) Death (including Family Funeral benefit) (if selected) Disability (if selected) Please see pages 8 to 17 for more on these benefits. Where is my Accumulated Credit invested?** It is very important that the money in the Fund is invested so that it can grow faster than inflation. This growth, which is also called the investment returns, is added to your Accumulated Credit. The value of your Accumulated Credit depends on how well the investments perform. The actual return depends on the timing of the investment of your contributions and underlying market conditions. Your Accumulated Credit is either invested in: the Management Board selected investment option, which is currently the Old Mutual Absolute Stable Growth Fund, or one of the SYmmETRY multi-managed funds (including an Islamic option), or a combination of the two. ** Your New Entrant Certificate and Annual Member Benefit Statement show where your Accumulated Credit is invested. 5
Management Board SELECTED INVESTMENT OPTION Old Mutual Absolute Stable Growth Fund MARKET-LINKED INVESTMENT OPTION SYmmETRY Aggressive Fund SYmmETRY Balanced Fund SYmmETRY Conservative Fund SYmmETRY Islamic Fund Key attributes The Absolute Stable Growth Fund is a smooth bonus fund. Smooth bonus is the method used to reduce members exposure to the ups and downs of the stock market. In times of strong investment performance some of the investment return is held back so that in times when markets perform poorly, there are funds available to declare a higher investment return. The investment return is declared by the Management Board, based on the performance of the underlying investments. The Absolute Stable Growth Fund provides an 80% guarantee. This means that your Accumulated Credit cannot fall more than 20% even in the most adverse market conditions. The Absolute Stable Growth Fund offers competitive, long-term investment returns and protects members from significant capital losses in adverse conditions. Multi-manager funds package the skills of a number of the best asset managers into a single pooled investment. The SYmmETRY funds operate on a daily unit price which moves up and down depending on movements in the stock market. These investment funds invest in the following domestic and offshore classes of assets: equities, fixed interest, money market and property. The percentage that each investment fund invests in each of these asset classes differs. The Aggressive Fund has the highest investment in equities and the Conservative Fund has the least exposure to equities. The higher the investment in equities, the more volatile the unit price will be in line with fluctuations in the stock market. Equities are also called growth assets because over the long term they provide the highest return of the various asset classes, but they are more volatile. Therefore, in the Aggressive Fund, higher investment returns can be expected over the long term but this comes with higher volatility. The Conservative Fund offers the least volatility but the investment returns can be expected to be far lower than the Aggressive Fund. The Balanced Fund lies between the Aggressive and Conservative Funds in terms of risk (volatility) and return. The Islamic Fund is Shariah compliant. 6
Members invested in SYmmETRY and who are within 5 years from retirement As you get closer to retirement you might wish to protect your Accumulated Credit from capital losses resulting from adverse market conditions. So, 5 years before your normal retirement date, if you are invested in the SYmmETRY Funds (except for the SYmmETRY Islamic Option), you have the option of transferring your investments to the Management Board selected investment option, Absolute Stable Growth Fund. In order to take up this option, you must complete the Member Investment Option Form. Part of your Accumulated Credit will be disinvested on an annual basis from the SYmmETRY Fund and invested in the Absolute Stable Growth Fund. The first disinvestment will take place 5 years before your normal retirement date and will continue annually until your Accumulated Credit is fully invested in the Absolute Stable Growth Fund (1/5th in year one; 1/4 in year two, 1/3rd in year three; 1/2 in year four; the balance in year five). The effective dates of the annual disinvestments will be the first of the month following your birthday and will be carried out automatically for a period of 5 years. In addition, all future monthly contributions will also be invested in the Absolute Stable Growth Fund. Investment fees The administrator deducts investment fees from the investment balance on a monthly basis. The fee amount depends on which investment fund is selected and the size of assets invested. The investment fee is determined at Umbrella Fund level, and not at individual participating employer level. If you are invested in the Absolute Stable Growth Fund, the balance of the investment is reduced by the amount of the fee. For SYmmETRY Funds, the unit holding is reduced by the unit equivalent of the investment fee. Example: You have R100 000 invested in SYmmETRY. funds will be disinvested as follows: Your AMOUNT DISINVESTED Year 1 R20 000 (1/5th of R100 000) Year 2 R20 000 (1/4 of R80 000) Year 3 R20 000 (1/3rd of R60 000) Year 4 R20 000 (1/2 of R40 000) BALANCE REMAINING R80 000 R60 000 R40 000 R20 000 Year 5 R20 000 (balance of remaining funds) R0 7
03 the benefits in more detail 8
Retirement Benefits When can I retire and what benefits will I receive? Normal retirement age (NRA) and normal retirement date (NRD) Your normal retirement date is at midnight on the last day of the month in which you reach your normal retirement age. Your normal retirement age is set by your employer in your terms and conditions of employment, but usually an age between 55 to 65 years. With the approval of your employer, you can retire earlier provided it is within 10 years of your normal retirement date. Your employer must confirm this in writing to the Fund. Your retirement will be effective at midnight on the last day of the month in which you retire early. Early Retirement: Ill Health If your employer is satisfied that you are unable, as a result of physical illness of body or mind, to perform the duties required for your occupation or post, you may retire earlier than your normal retirement date. You will then retire at midnight on the last day of the month in which you retire early. Early Retirement: Termination of employment for operational reasons (such as retrenchment or restructuring of your company) Provided your employer certifies that your employment has been terminated for operational reasons before your normal retirement date, and provided that you are not more than 10 (ten) years younger than your normal retirement age, you can retire earlier than your normal retirement date. You will then retire at midnight on the last day of the month in which you retire early. Late (deferred) Retirement Provided that you have your employer s consent (and it is specified in the special rules of your employer s scheme), you can retire at midnight on the last day of any month after your normal retirement date. Contributions will still be payable during the period of membership after retirement. What benefit is payable at retirement? You will receive a benefit at the date of your retirement equal to your full Accumulated Credit. If you are a member of the pension fund, you must purchase (buy) a pension with a minimum of 2/3rds of your Accumulated Credit from any insurance company. The remaining 1/3rd will be paid to you in cash. If you are a member of the provident fund, you can purchase a pension with your full Accumulated Credit, OR You can take any portion of your Accumulated Credit in cash and use the remainder to purchase a pension, OR You can take your full Accumulated Credit in cash. The pension must be: purchased from a registered insurer; in your name; compulsory, non-commutable and non-assignable [these are the technical terms used to describe the type of annuity that you have to purchase; they mean that you must purchase a pension in terms of legislation and the Rules of the Fund, and that the pension may not be transferred to another person or taken in cash]; and payable at least for your lifetime. The Fund s obligation to you will cease when you buy the pension. Should I take a cash lump sum and what should I do with it? The decision whether to take a cash lump sum and if so how to use it, should not be taken lightly, as you need to ensure that you provide for your financial security during retirement. It may be advisable to use some of the available cash lump sum to clear any debt you may still have (e.g. a housing loan). The investment of your lump sum is a very important decision and we strongly urge you to speak to a qualified financial adviser about the best options for you. 9
What do I have to do to receive my retirement benefit? You need to complete and submit an original Old Mutual SuperFund Retirement Benefit Claim form together with the necessary supporting documentation. Purchasing a pension Purchasing a pension is also known as buying a pension. Your retirement money is paid over to an insurer of your choice, who will provide you with a regular monthly income. You can choose between different kinds of pensions. Your choice should depend on your circumstances and it will affect, for instance, the size of your pension income, whether your pension will increase in future, the extent of the increase, if any, whether your dependants will receive a benefit after your death, and whether you will be able to control your level of income after retirement. Most insurers offer four basic pensions (even though they may call them by different names): Annuity types Level annuity Provides a guaranteed level income for the lifetime of the individual. This amount never increases. Inflation-linked annuity Provides a guaranteed income growing with inflation for the lifetime of the individual. Bonus-escalating (with profit) annuity Provides a guaranteed income for life This income grows each year with a bonus declared by the insurer based on the smoothed performance of an underlying investment portfolio. If you have saved a big enough retirement benefit, a combination of these different pensions may be chosen. Combining different pensions gives you the advantage of more flexibility in providing for your needs and determining your income levels. You also have greater peace of mind by not having all your eggs in one basket. Another reason why it is advisable to start saving well in advance. Retirement is one of the most important events in your life. Whilst it is always advisable to obtain advice from a registered and qualified adviser, the Trustees have selected an annuity design that is suitable for most members. At retirement, members can either purchase an annuity on the advice of an accredited financial adviser or choose the fund selected annuity. These Trustee-selected annuities equip you as a member to retire without receiving advice on the type of annuity. The Fund Select Annuity s benefits for members: - It simplifies the decision making process at retirement, and helps you to navigate the complexity of the decisions faced - This generic guidance comes from a highly trustworthy source, the Trustees - You still have access to financial advice if required - Advice costs are payable only if you request advice. This Fund Select Annuity is not a substitute for personalised financial advice, but for retirees who are seeking generic guidance and cost savings, it is a good alternative. Living annuity Income is based on the performance of the chosen underlying investment portfolios. Individuals choose their income level for each year. This solution does not provide longevity protection (i.e. protection against an increased life expectancy). These pensions are subject to the requirements of the South African Revenue Services as issued from time to time. Withdrawal Benefits If you withdraw from the Fund due to resignation, dismissal or retrenchment, you will receive a withdrawal benefit equal to your Accumulated Credit. For most people, their retirement fund is the biggest retirement savings they have. Simply taking your 10
withdrawal benefit from the Fund and spending it may lead to financial hardship when you retire. There are a number of options available to you and you should consider issues such as tax implications, flexibility, opportunity for growth and your own needs before deciding what to do with your withdrawal benefit. You should consider speaking to your financial adviser before electing how your benefit is paid. WHAT WILL I RECEIVE FROM THE FUND? You will receive your Accumulated Credit upon withdrawal from the Fund. On receipt of your exit notification, your Accumulated Credit will be disinvested from the investment fund and held in the Fund s bank account. This is currently the investment fund selected by the Management Board to preserve capital until payment is made. Interest will be added to your Accumulated Credit from disinvestment to the date of payment. You may choose to: Preserve your benefit Option 1 Your withdrawal benefit can be transferred to a preservation fund. A preservation fund allows you to preserve your retirement benefit when you leave your employer, without having to pay tax. It is a specially designed pension or provident fund with a Management Board. The fund is approved by the authorities and run by an assurance or investment company. onwards but you may not access any part of your benefit before then. Option 3 You also have the option of transferring your benefit to your new employer s retirement fund, if the new fund allows for this. Depending on the type of funds involved, this transfer may also be tax-free. Your benefit will thereafter be managed by the new fund s Management Board in terms of the new fund s rules. You will only be able to access your benefit once you terminate your employment with your new employer. Take cash You can take your withdrawal benefit as a cash lump sum. If you take it in cash, part of the benefit may be tax-free depending on the Income Tax legislation applicable at the time. If you don t reinvest this money, you may find that you don t have enough saved when you retire. Tax on withdrawal will be calculated according to the following cumulative tiere tax tables: RESIGNATION/DISMISSAL WITHDRAWAL RATE OF TAX BENEFIT Up to R22 500 0% 18% of the amount R22 501 - R600 000 over R22 500 R103 950 plus 27% of the R600 001 - R900 000 amount over R600 000 R184 950 plus 36% of the R900 001 upwards amount over R900 000 The advantages are: Your transfer will be tax-free. You may make one withdrawal from your preservation fund before retirement. If you transfer to Old Mutual s Protektor Preservation Pension or Provident Funds, you will not pay any upfront administration fees. Option 2 Your withdrawal benefit can be transferred taxfree to a retirement annuity fund. You may start receiving a pension any time from the age of 55 RETRENCHMENT WITHDRAWAL RATE OF TAX BENEFIT Up to R300 000 0% 18% of the amount R300 001 - R600 000 over R300 000 R54 000 plus 27% of the R600 001 - R900 000 amount over R600 000 R135 000 plus 36% of the R900 001 upwards amount over R900 000 11
What forms do I have to complete if I withdraw from the Fund? Do my insured benefits cease when I leave the Fund? Your employer must complete an electronic claim form on the Data-I (payroll system) or alternatively submit an original Old Mutual SuperFund Withdrawal Claim form together with the necessary supporting documentation. It is very important that the Fund is informed of your option to either preserve your benefit or take cash. If you preserve your benefit, you must inform the Fund of the details of the fund to which your benefit must be transferred. If you choose cash, your tax affairs must be in order and your banking details must be provided to the Fund. Without this information, you can expect delays in the payment of your benefit. What happens if I don t indicate how my benefit must be paid to me? If the Fund is not informed of your choice to either preserve or take your benefit in cash within 60 days of leaving employment, your benefit will be transferred to the Old Mutual Protektor Preservation Fund where it will remain until you claim it from that Fund. It will be invested in a capital preservation fund. What happens if the Fund cannot trace me? Your benefit will be considered unclaimed, if the Fund is unable to trace you or, for some reason, unable to pay your benefit within 24 months of your leaving employment. During this time, the Fund will take reasonable steps to make contact with you, including providing your details to a Tracing Service Provider, who may make contact with you. Your benefit will be transferred into the Unclaimed Benefit Account where it will be invested in a capital preservation fund until you claim it. Expense fees are deducted from the Unclaimed Benefits Account on a monthly basis. Tracing costs will be recovered from your benefit amount when the benefit is paid. Yes, your insured benefits cease when your membership of the Fund terminates unless your employer has selected the Conversion Option. If your employer selected the Conversion Option, you may be able to convert your cover to an individual insurance contract with Old Mutual. If you want more information about this, please speak to your financial adviser. Death Benefits Should you die, your Accumulated Credit will become payable to your dependants and beneficiaries. Your benefit is paid out by the Management Board of the Fund according to strict guidelines laid down in the Pension Funds Act see page 13 for more on how the death benefit is allocated. Your employer may also have chosen one of the following options please contact your employer to confirm which benefits apply to you. The Orion benefit option of the Old Mutual SuperFund offers the following risk benefits if you die in service: Lump Sum Death Benefit: If selected by your employer, on your death, a lump sum benefit plus your Accumulated Credit is payable. Accident Death Benefit: If selected by your employer and if you die as a result of an accident, a lump sum benefit in addition to the lump sum death benefit above, and your Accumulated Credit, is payable. Family Funeral Benefit: If selected by your employer, a lump sum is payable should you, your spouse and/or your children die. This benefit is not provided by the Fund; it is provided by an Old Mutual policy that has been taken out by your employer. It is also possible for your employer to provide lump sum death benefits and accident death benefits through policies that it has taken out with Old Mutual. These are not paid by the Fund and 12
therefore are not distributed by the Management Board in terms of the Pension Funds Act. These benefits are not covered by this member guide. Please refer to your New Entrant Certificate or Annual Member Benefit Statement to see if you are eligible for any separate (non-fund) benefits. More about the Family Funeral Benefit This benefit is designed to cover you, your spouse (maximum 2) and children in the event of death, to cover the costs involved in funeral arrangements and other associated expenses. Children will remain covered up to the maximum age of 21 and this will be extended up to age 25 if the child is a full-time student (with proof of studies) and will be extended indefinitely if the child is wholly, and has been continuously, dependent on the member as a result of mental or physical illness that prevents him/her from maintaining him/ herself. The maximum Family Funeral Benefit currently allowed is as follows: Principal member R60 000 Spouse R18 000 Children +14 years R18 000 6-13 years R12 000 0-5 years R6 000 Stillborn R3 000 Please ask your employer for the cover amounts that apply to you. from anywhere in the world to the funeral home closest to the place of burial in South Africa. If the death occurs in South Africa, the cost of a family member accompanying the body would also be covered by the service. Other features include legal assistance, referral to a pathologist and psychologist (if required), and discounted funeral packages with reputable funeral service providers. The service can be accessed through a 24-hour call centre operating in all 11 official languages at 0860 000 500. Who allocates my death benefit and how? The Fund death benefit (comprising your Accumulated Credit plus, if applicable, the lump sum death benefit and accident death benefit) is not necessarily paid out according to your last will and testament. The Pension Funds Act lays down strict guidelines that the Management Board has to follow. The steps that the Management Board must follow are: Tracing dependants: The Management Board must first trace your dependants, if any. Your beneficiary nomination form is used to help the Management Board with this process. The investigation must be very thorough and the Board has up to 12 months to complete it. Because the Management Board does not know your circumstances, they rely on information supplied by your employer and the details of the dependants and nominees listed on your nomination form. Special committees are often formed to trace your dependants and to do the investigation for the Management Board. Funeral Support Service You and your immediate family (i.e. spouse and dependent children), who are covered for Death and/or Family Funeral benefits, will be eligible for this service. This service has a range of benefits foremost among them the provision that, in the event of your death or the death of an immediate family member, the deceased will be transported Establishing need: The Management Board must then consider the financial need of all your beneficiaries, rather than the amount these people would expect to receive based on their relationship to you. Although their relationship to you is important, it s only one factor. Financial need or existing dependency is still the most important factor. 13
Dividing the benefit: If you have dependants, the Management Board will use its discretion to decide how much each dependant should receive. This will be based on an objective assessment of all the facts. If you have nominated a beneficiary who is not a dependant, the Board may override your nomination if it believes there is a valid reason to do so. If you have NO dependants, but have nominated people you would like to receive part of your death benefit (nominees), the Board will probably pay these nominees as you have indicated on your beneficiary nomination form. Who will receive my death benefit? The people who will receive your death benefit are called beneficiaries. There are two kinds of beneficiaries, namely dependants and nominees. Dependants According to legislation, a dependant is: your spouse to whom you are married in accordance with a civil ceremony, a customary union or a marriage recognised by a major religion; your children, whether over the age of 21 or not; any other person to whom you provide financial support, e.g. your parents, a person living with you, a stepchild, a foster child or a friend. Nominees A nominee is a person whom the Management Board does not regard as being dependent on you, but whom you wish to nominate to receive a portion of your benefit. These people must be listed on your nomination form in order for the Management Board to take them into account when deciding who to pay the benefit to. Beneficiary Nomination Form To help the Fund to pay your benefits to the right people, it is recommended that you nominate dependants or nominees to receive your death benefits. You can make the task of the Management Board far easier and probably speed up payment, by ensuring that your beneficiary nomination form is always up to date and reflects ALL your dependants. Please give your completed form to your employer for safekeeping and ensure that the form is updated when necessary, e.g. if you get married, have a child, etc. Important conditions for the payment of death benefits: (1) If your employer selects lump sum death benefits and accident death benefits, your participation will be on condition that you comply with the insurability requirements. (2) The limitations and conditions set by Old Mutual from time to time will apply. (3) The liability of the Fund is limited in respect of any of these insured benefits may not exceed the amount that is actually paid by Old Mutual to the Fund. (4) The amount of the insured benefit may be limited to the evidence of health limit that is set by Old Mutual from time to time, unless you submit the necessary evidence of your good health to the satisfaction of Old Mutual. Your employer is notified of the latest evidence of health limit every year. Please refer to page 17 of this guide for the Travelling Nurse services that we offer. You may request a copy of the applicable insured benefits policy and policy schedule from your employer. Disability Benefits This is only applicable if your employer has selected these benefits. Please contact your employer to confirm which benefits you are eligible to receive. The following two types of disability benefits are available: Disability Income Benefit This benefit is not provided by the Fund; it is provided by an Old Mutual policy that has been taken out by your employer. This benefit pays a monthly 14
income once the disability claim has been accepted by Old Mutual. If you qualify for a disability income benefit you will remain a member of the Pension or Provident Fund, as the case may be. The benefit will continue to be paid to you until the earlier of: your normal retirement date age 65 when Old Mutual finds you fit to work, or your death. When your disability income benefit cease, you will become entitled to your Accumulated Credit (except when you return to work with your existing employer). The Disability Income benefit payable is equal to a percentage of your annual pensionable salary. This percentage is selected by the employer but is limited to 75% of your annual pensionable salary. There is a waiting period of between 3 and 6 months (depending on the waiting period selected by your employer and specified in the insured benefit policy) from the date of disablement to date of payment. No disability benefits are paid during the waiting period. The payment of your disability income benefit is subject to periodic re-assessment by Old Mutual. Who qualifies for a Disability Income Benefit? If your occupation is other than a Driver, Pilot, Security Guard or Sea-going Fisherman, you may qualify for a disability income benefit if: for the first 24 months (after completion of the waiting period) you are totally incapable of performing your own occupation with any employer as a result of a condition that continued for the duration of the waiting period and arose from an injury or illness, and thereafter you are totally incapable of performing your own and any alternative occupation with any employer. If you are a Driver, Pilot, Security Guard or Seagoing Fisherman, you may qualify for a disability income benefit, if you are totally incapable of performing any functions with any employer, that will enable you to generate an income, as a result of a condition that continued for the duration of the waiting period and arose from an injury or illness. Are there any exclusions? Disability will not be recognised if it is as a result of: a pre-existing condition (see below); wilful self-inflicted injury or suicide during the first 24 months of participation; or active participation in war, invasion, acts of foreign enemies, hostilities, warlike operations, civil war, rebellion, revolution, insurrection, civil commotion assuming the proportions of or amount to an uprising, military power or usurped power; or the use of nuclear, biological, chemical or any radioactive contaminants arising from such use; or any attack on or sabotage of facilities and storage depots, that leads to the release of radioactivity or nuclear, biological or chemical warfare agents. Please refer to the Old Mutual Orion Selektor Policy for full details of exclusions. A claim will be declined if the disability is directly or indirectly as a result of any injury that occurred, illness or condition that existed, or surgical operation undergone during the 6-month period (24 months for less than 20 members and municipalities) before you became covered for disability benefits and as a result of which you become disabled within the 12-month period (24 months for less than 20 members and municipalities) after being covered for disability benefits. The specified periods referred to are selected by your employer and detailed in the policy schedule issued to your employer. Beneficiary Assistance Benefit This benefit allows for an additional 3 times your monthly Disability Income Benefit to be paid to a nominated Beneficiary in the case of your death. In order to qualify for this benefit, the beneficiary section of the Disability claim form must be completed. Lump Sum Disability Benefits This benefit is paid by the Fund if your employer selected the Fund benefits or it will be paid by an Old Mutual policy that has been taken out by your employer if your employer selected separate (non- Fund) benefits. 15
The benefit amount could be less, but is usually the same as the lump sum death benefit, and also reduces by 1/60th each month in the five years leading up to normal retirement date. The maximum cover amount is currently the lesser of R5 million and 5 times your annual salary. If you become totally and permanently disabled before reaching your retirement age or age 65, whichever is the earlier, then the lump sum death benefit will become payable. The benefit is paid as a pension if you are a member of the pension fund or as a cash lump sum if you are a member of the provident fund. Who qualifies for a Lump Sum Disability Benefit? The following disability types are recognised: 1. Occupational disability 2. Partial occupational disability 3. Paralysis 4. Loss of limbs or loss of sight 1. Occupational disability In order to qualify for occupational disability, you must be totally and permanently incapable of performing: 1. Any occupation, in the case of a driver, pilot, security guard or sea-going fisherman, or 2. The occupation as selected by your employer and as specified in the Policy Schedule, as a result of a condition that continued for the duration of the waiting period and arose from an injury or illness. In terms of 2 above, the occupation could be either: Own and any alternative occupation with any employer (a) The type of work you were performing immediately before the start of the waiting period and could perform with any employer, and (b) any alternative occupation with any employer, for which you are suited, taking into account your age, education, training, knowledge, ability and experience. OR Any occupation with any employer Any functions with any Employer that will enable you to generate an income. Ask your employer for the type of occupation you are covered for. 2. Partial occupational disability Own and any alternative occupation with own employer (a) The type of work you were performing with your employer immediately before the start of the waiting period, and (b) any alternative occupation with your employer, for which you are suited, taking into account your age, education, training, knowledge, ability and experience. 3. Paralysis You have totally lost the use of both hands, or both feet, or one of each for the duration of the waiting period and such loss is permanent in Old Mutual s opinion. 4. Loss of limbs or loss of sight You have sustained loss of both hands, or both feet, or one of each. Or you have been totally blind in both eyes for the duration of the waiting period and such loss of sight is permanent in Old Mutual s opinion. Are there any exclusions? Disability will not be recognised if it is as a result of: a pre-existing condition (see below); wilful self-inflicted injury or suicide during the first 24 months of participation; or active participation in war, invasion, acts of foreign enemies, hostilities, warlike operations, civil war, rebellion, revolution, insurrection, civil commotion assuming the proportions of or amount to an uprising, military power or usurped power; or the use of nuclear, biological, chemical or any radioactive contaminants arising from such use; or any attack on or sabotage of facilities and storage depots, that leads to the release of radioactivity or nuclear, biological or chemical warfare agents. Please refer to the Old Mutual Orion Group Life Assurance policy for full details of exclusions. A claim will be declined if the disability is directly or indirectly as a result of any injury that occurred, illness or condition that existed, or surgical operation undergone during the 6-month period (24 months 16
for less than 20 members and municipalities) before you became covered for disability benefits and as a result of which you become disabled within the 12-month period (24 months for less than 20 members and municipalities) after being covered for disability benefits. The specified periods referred to are selected by your employer and detailed in the policy schedule issued to your employer. What happens if my employer has not selected disability benefits? If your employer has not selected any disability benefits and you become disabled, you may be eligible for early retirement benefits; failing which you will have to withdraw from the Fund. Refer to the sections in this member guide on retirement benefits and withdrawal benefits or to the Rules for eligibility for those benefits. Important conditions for the payment of disability benefits: (1) If your employer selects disability benefits, your participation will be on condition that you comply with the insurability requirements. (2) The limitations and conditions set by Old Mutual from time to time will apply. (3) The liability of the Fund to you in respect of any of these insured benefits may not exceed the amount that is actually paid by Old Mutual to the Fund. (4) The amount of the insured benefit may be limited to the evidence of health limit set by Old Mutual from time to time unless you submit the necessary evidence of your good health to the satisfaction of Old Mutual. Your employer is notified of the latest evidence of health limit every year. Please refer below for the Travelling Nurses service that we offer. Historically members had to visit a doctor for medical reports and blood tests. This requirement often left members with reduced cover until the underwriting requirements of the insurer were met. The Travelling Nurses role supports a seamless and hassle free underwriting process. Travelling Nurses are registered nurses, employed by Old Mutual. These nurses visit members at their place of work during office hours to help fulfil the initial underwriting requirements. You can set up an appointment by calling the call centre on 0860 687 737. A nurse will then contact you to set up an appointment at a time that is convenient for you. The call centre will require the following information: Scheme code Surname Initials ID number Telephone number at work Cell phone number Contact person Business address As initial underwriting is at the cost of the insurer, the Travelling Nurses services are offered at no extra cost to you. Please note that you must present your identity documents to the Travelling Nurse in order for the tests to be conducted. You may request a copy of the policy and policy schedule from your employer. TRAVELLING NURSES (South Africa) If your Lump Sum Death and/or Disability benefit is limited to the evidence of health limit, referred to above, and you are required to submit evidence of your good health, you can make use of Old Mutual s Travelling Nurses services. 17
18 04 Management Board looking after your money
A Management Board (also referred to as Trustees) oversees the operations of the Old Mutual SuperFund. At least fifty percent of the Management Board members must be independent of Old Mutual. The Management Board is responsible for the dayto-day management of the Fund. They have to: manage the Fund in an efficient and transparent way; choose investment managers and investments; impartially distribute death benefits to beneficiaries; communicate regularly with members; respond to disputes and prevent conflicts of interest; and know and understand the Rules of the Fund and any laws that affect the Fund. Please refer to the Old Mutual SuperFund website for more information about the members of the Management Board www.oldmutual.co.za/superfund. One of the ways in which the Management Board fulfils its responsibility of communicating to you regularly is to send you a statement of your benefits each year. The next section looks at how this statement can help you keep a record of your retirement savings 19
20 05 Annual Member Benefit Statement
HOW CAN I KEEP TRACK OF MY retirement savings? At least once a year you receive a Member Benefit Statement from the Fund. It gives up-to-date information on the benefits you can expect to receive from your Fund. The statement includes all contributions received and processed up to the date of the statement. The benefits are based on your pensionable salary on record with the Fund at the time. The benefits change from year to year as your salary and contributions change, and as the investment returns are added. What must I do with my statement? Make sure your personal information on the statement is correct and inform your employer or the Service Centre (0860 20 30 40) immediately if there are any errors or changes. Think about whether you are making enough provision for your future or speak to a financial adviser/intermediary if you are unsure. As your retirement planning affects your family as well, discuss it with them. Should you die or be unable to make your own arrangements due to injury or ill health, your family will at least know what to do. Keep all your statements in a safe place. 21
22 06 Resolving Disputes
What if I have a complaint against the Fund? You may lodge a complaint if you feel that: the Fund made a decision outside of its powers, or you were prejudiced as a result of poor fund administration, or there was a dispute of fact or the law, or your employer has not fulfilled its duty in terms of the Rules. Send your complaint, in WRITING, together with as much information as possible to the Old Mutual SuperFund Service Centre or to your employer. The Service Centre s postal address is: Old Mutual SuperFund: Orion P O Box 728 Cape Town 8000 Alternatively, send the written complaint directly to the Management Board. The postal address of the Board is as follows: The Principal Officer Old Mutual SuperFund PO Box 167 Cape Town 8000 You have a right to receive a reply within 30 days after your complaint has been received. If you do not receive a response or if you are not satisfied with the response you receive, you can send your complaint to the Pension Funds Adjudicator: Guidelines on how to lodge complaints with the Pension Funds Adjudicator, the necessary forms and full contact details can be found on the Adjudicator s website, www.pfa.org.za. Conciliation as an option to resolving disputes The Pension Funds Adjudicator has introduced a conciliation process to reduce the backlog of complaints. All complaints currently lodged with the Adjudicator may be considered for conciliation. The process is facilitated by independent conciliators appointed by the Pension Funds Adjudicator, and proceedings can be attended either in person or, in exceptional circumstances, telephonically. If your complaint is referred to conciliation, you will receive a notice setting out the venue, date and time of your conciliation hearing, as well as the details of the conciliator involved. To ensure equity, neither party is allowed legal representation at a conciliation hearing. If conciliation results in a settlement, the written agreement will have the same force and effect as a determination made by the Adjudicator. Should conciliation fail to resolve your complaint, the Adjudicator will investigate and rule on your complaint. The conciliation guidelines are available on the Adjudicator s website, www.pfa.org.za. The Pension Funds Adjudicator Ground & 1st Floors Corporate Place Corner of Fredman Drive & Sandown Valley Crescent Sandton 2196 23
24 07 IN CLOSING
As a member of a retirement fund, you have many benefits as well as some responsibilities of your own. Having read this member guide, you should now have a better understanding of the important points, which are: What your Fund offers you What your responsibilities are Who looks after your money What information you receive from the Fund How the Fund works What benefits are paid out in the case of: - Retirement - Withdrawal - Disability - Death What to do if you re unhappy with the Fund If you have any further questions, please contact your employer or, alternatively, the Old Mutual Service Centre on 0860 20 30 40. The official Rules of the Fund, financial returns and the most recent actuarial report, are available from the Fund please contact the Service Centre. Sharing the information Please also share this information with your family, as they should know what to expect if something should happen to you. 25
OLD MUTUAL SUPERFUND Notification of Dependants and Beneficiaries Form Please tick appropriate block: Evergreen Orion Easy Benefit Plan Please refer to the guidelines on how to complete the form. If there is not enough space on the form for all your beneficiaries, please make a photocopy of this form, complete and return together with the original form. Complete using block letters Employer Name Member Surname Member Reference Number Home Telephone Number Scheme Code Member Full Names ID Number/Passport Number Cellphone Number Marital Status: Single Married Divorced Separated Widowed I hereby nominate the following persons, who are my dependants and/or nominees, for any benefits due to be paid from the scheme in the event of my death Surname Full Names Title ID/Passport Number Contact Telephone Number Relationship (e.g. spouse, partner, daughter, son, mother, friend, etc.) Financially dependent on Member (Y/N) % Share Other Nominees Dependants Very Important the column on the right MUST add up to 100% 100% I understand that this nomination cancels all previous nominations, if any, that I have made with respect to my membership of the abovementioned scheme. Member s signature Date IN RESPECT OF PENSION AND PROVIDENT FUND ONLY: In terms of Section 37C of the Pension Funds Act 24 of 1956, the Trustees of the fund have a duty to apportion the benefits between your dependants and nominees, as may be deemed equitable. Dependants are defined according to specific criteria in the Act and may either be legal or factual dependants. Your nomination will serve as a guide to the Trustees when making these decisions. Please give your completed form to your employer for safekeeping and ensure that the form is updated when applicable. For Evergreen clients, you are welcome to return your completed form to Old Mutual SuperFund, PO Box 167, Cape Town 8000 or fax it to 0860 383 848. We do, however, advise that Evergreen clients give a copy to your employer for safekeeping. 26
Nominating beneficiaries for your death benefits Should you die while still a contributing member of the SuperFund, a death benefit will be paid to your dependant/s and/or beneficiary/ies. The benefit consists of a death cover amount (if applicable) plus your accumulated credit in the Fund. Please refer to your Member Benefit Statement for more information. Please complete a new beneficiary nomination whenever the information on this form changes, for example your marital status, number of children or any addresses. Give any special instructions or additional information in a separate letter to this form. Step 1: List your dependants and beneficiaries 1. First list the details relating to your husband/wife in the space provided. If you have more than one wife, a customary law wife or a life partner (i.e. someone with whom you live as if married, whether same sex or other), please include their details. 2. Next, list ALL your children, including those adopted, from previous marriages or born outside of marriage. Include the name of their current guardian (if not you) and the name of the person who will be their guardian, should you die. 3. Now list any legal dependants, such as a divorced wife from a previous marriage to whom you are paying maintenance, or anyone else who receives financial support from you (for example an aged parent, a family member or even a friend). 4. Finally, if there is anyone else whom you would like to receive a part of your benefit, list these beneficiaries, under Other Nominees on the previous page. Step 2: Share the benefit After you have listed all your dependants and beneficiaries, you need to decide how much (if any) of your benefit you would like them to receive. Keep in mind that Not everyone on the list needs to have a share allocated to him/her. The more beneficiaries you choose to receive a share, the smaller each individual s benefit may be. The percentages in the Share of Benefit column must add up to a total of 100%. In the case of Pension and Provident Funds the Trustees will have the final say in how your benefit is divided, as they need to comply with the Pension Funds Act. Step 3: Give additional motivation To distribute your benefit as fairly as possible, it would help the Trustees (or your Employer, in the case of risk-only schemes) to understand why you have proposed certain share allocations to your beneficiaries. For example, a member may propose that one minor child receives a large share while the other minor child receives nothing, if the one is disabled and the other has a very good scholarship. Write your motivation(s) in a letter and return with this form, thereby assisting the Trustees in understanding your share allocation. 27