Retirement saving solutions for your employees
Attracting and retaining staff is a key challenge for most employers and offering a retirement savings solution is an essential part of any employer’s value proposition. Let us help you and your employees get the best chance of achieving a comfortable retirement.
Courtney Capital Staff Retirement Solutions
1. Allan Gray Umbrella Retirement Fund
The Allan Gray Umbrella Retirement Fund allows multiple employers to use a single structure to help their employees save for retirement. The Fund provides the structure and tax benefits, while the investment return comes from the underlying investment portfolios. Consider this if you:
- Require a limited range of investment portfolios at competitive prices
- Would like to set up a retirement scheme that your employees can join as a condition of employment
- Would like your employees to have the option of accessing their investment when they change jobs
2. Allan Gray Group Retirement Annuity
The Allan Gray Group Retirement Annuity enables employers to make a retirement savings solution available to their staff based on individual membership of the Allan Gray Retirement Annuity Fund, with the benefits of group-based administration. Consider this if you:
- Require a wide range of unit trusts at prices applicable to other Allan Gray products
- Would like to offer your employees a flexible retirement savings solution that they own in their name
- Would like your employees to only be able to access their investment when they retire after the age of 55
How does the Allan Gray Group Retirement Annuity work?
Each employee individually applies to become a member of the Allan Gray Retirement Annuity. Every month, the employer deducts the agreed monthly contribution from each employee’s salary and pays this over to Allan Gray on the employee’s behalf. As individual members of the Allan Gray Retirement Annuity, the employees make their own unit trust selection, and receive quarterly statements from Allan Gray.
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FAQ
Frequently asked questions about group retirement schemes.
What is the minimum number of employees allowed for a group system?
A minimum of five employees is required to make use of the group retirement annuity system.
What are the minimum contribution amounts?
R500 per month per employee.
How can contributions be reconciled for each employee?
Allan Gray will act on the instructions and payments received from employers. Employers deduct employees’ contributions from their salaries and pay these via EFT (electronic fund transfer) to the Allan Gray Retirement Annuity bank account on a monthly basis. To help employees monitor and reconcile the contributions made on their behalf, and to check that these contributions have been invested into their selected unit trusts, Allan Gray will send quarterly statements to each employee. Employees can also monitor and manage their investments by registering for a secure online account. Employees may change their contribution levels with their employer.
Can I make membership a condition of employment?
Yes, but Allan Gray cannot enforce this contractual obligation.
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Comparison
| Group retirement annuity | Traditional pension or provident fund | |
| Choice and control | Employees pick underlying unit trusts to suit their needs and personal circumstances. | Employees often have limited control over their investment. |
| Leaving an employer | Employees can continue to contribute to their retirement annuity in their personal capacity. Employees cannot `cash in´ any benefit if they leave their employer. | Members may be allowed a partial or full withdrawal, but this will be subject to tax. When members leave their employer their membership of the fund ends. |
| Transfers | Employees can transfer any benefits under the Allan Gray Retirement Annuity to another approved retirement annuity of their choice at any time without penalty. | Some funds may charge penalties if members leave before they retire. |
| Withdrawals | Employees may only withdraw from the retirement annuity in the following circumstances: 1. The total investment value of all retirement annuity investment accounts is less than/equal to R7000 and they are not contributing to their retirement annuity anymore; | Depending on the fund rules, members may be allowed to make a withdrawal. |
| Retirement age | 55 | 55, but depends on the employer. |
| Insurance | There are no insured death or disability benefits. Any risk protection or additional benefits must be sourced separately. | Life and disability insurance are often part of the package. |
| Benefit at retirement | Employees are only legally allowed to take out up to one-third of their investment as cash. The rest must be transferred to an investment that will provide a retirement income. | Employer funds sometimes pay members their retirement benefits from the fund, without the member needing to transfer to another investment. Some employer funds give employees a specified retirement benefit – or pension – when they retire. In other funds, the benefit is not guaranteed and depends on how much is contributed and how well the investment performs. |
| Emigrating or accessing funds as a foreign national | Funds can only be accessed if the emigration is recognised by SARS. | Foreign nationals cannot access their funds until age 55 and will have to purchase a living annuity in SA, unless they go through a formal emigration process recognised by SARS. |
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What happens when an employee resigns?
If an employee resigns, they may continue to be a member of the Allan Gray Retirement Annuity in their own right. They can continue investing via a debit order, stop contributing without penalties and start contributing again any time.
How does financial advice from Courtney Capital work in the context of the group retirement annuity?
We believe independent financial advice plays an important role in helping:
- You to decide on the most appropriate retirement funding product for your staff, and
- Your employees to make the best investment decisions for their circumstances.