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ABSA SMALL ENTERPRISE PROVIDENT FUND

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EMPLOYERS' AND EMPLOYEES' GUIDE

A UNIQUE PROVIDENT FUND FOR THE SMALL, MICRO AND MEDIUM BUSINESS SECTOR AND THE DOMESTIC SECTOR ADMINISTERED BY ABSA CONSULTANTS AND ACTUARIES

The unique Provident Fund that offers employers and employees Retirement, withdrawal, death and funeral benefits in one package

Absa

You have worked hard towards success in your business and home. You have also invested a lot of time and resources in your employees because they form the backbone of your business. They know you and your business and you rely on them. But what would happen if they left you because they were offered a more comprehensive package?

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The ABSA Small Enterprise Provident Fund is designed specifically with the small, micro and medium business in mind, and there is no minimum number of employees you need to have in your employ before you can participate in the fund. The ABSA Small Enterprise Provident Fund is a Provident Fund, and is registered with the Financial Services Board (12/8/36541/1), and approved by the Commissioner for SARS. (18/20/4/39342). The fund is structured as a provident fund, offering lump sum retirement and withdrawal benefits, with associated separate group schemes offering group life and group capital disability benefits, with separate family funeral benefits offered by Financial Solutions.

By offering employee benefits through the above employee benefits solutions you will have the competitive edge and be assured of stable, happy and productive employees, which in turn will lead to higher productivity and a lower personnel turnover. By registering your employees as members of this fund, your responsibilities towards them at retirement, in the case of disablement or unforeseen death and the resulting funeral costs and financial assistance towards dependents afterwards, decrease significantly. And to top it all, the Receiver of Revenue allows you to deduct your fund contributions.  Isn't it time you took a closer look at what ABSA Employee Benefits Solutions can do for you?

The ABSA Small Enterprise Provident fund was developed by Absa Consultants & Actuaries, an acknowledged market leader in the field of employee benefits, and Financial Solutions have entered into a formal relationship with Absa to offer the same benefits to clients of Financial Solutions. The ABSA Plan Based Umbrella Funds are cost-effective and moreover, result in a strategic benefit for your business.  By registering your employees with either of the ABSA Plan Based Umbrella Funds you will provide them with retirement benefits and take care of their needs in the event of death and disability, as well as providing funeral benefits.

A plan that puts you in control

The ABSA Small Enterprise Provident Fund offers you a choice of four plans, all of which have their own benefit structure. All permanent employees between the ages of 15 and 65 may join the fund. You do not have to put all your employees on the same option - you choose whichever option suits you and your employees' individual needs best. When you as a participating employer join the Fund, your current employees have the option to join the fund within the first six months.  All new employees employed by you after you have become a participating employer will be compelled to join the fund in terms of the Income Tax Act. The Fund is extremely flexible so that you can even make additional contributions for specific employees, according to the employee's particular situation. A unique feature of the Fund is the option that employers can amend their choice of option on an annual basis provided that the increased risk benefits will be subject to accidental cover for the first three months from the change in cover. This enables you to accommodate changing circumstances of employees. Furthermore, benefits will not be eroded by inflation as the Fund makes provision for annual inflation related contribution- and benefit increases. The Trustees determine these increases which come into effect on 1 August annually.

How the contributions are invested

The costs of providing the death, disability and funeral benefits and a trustee approved administration fee are deducted from the monthly contribution. To provide for retirement funding, the balance of the contribution is invested by independent investment managers. Their mandate is clear - optimize investment returns for fund members, bearing in mind the risk profile of the average member. For this reason the Trustees follow a generally conservative investment strategy.

If a Financial Advisor is involved in advising you and placing the business with Absa Consultants & Actuaries, commission is payable according to the Regulations under the Long Term Insurance Act of 1998 as gazetted from time to time.  This amount is also deducted from the monthly contribution.  The benefit of having a Financial Advisor is that he/she is there to provide ongoing advice and can assist in the finalisation of claims when the need arises.

Reducing Costs

We realize that cost is always a factor and keeping it as low as possible is important to you and the members of the fund. 

The Fund is obliged to recover contributions by debit order due to the cost savings involved.  This working method allows the Fund to service its members on a sound financial and administrative basis. Any other means of collecting contributions results in a direct cost component, which will increase the administration fees. For this reason, this is the only method of payment provided for.

Absa Consultants & Actuaries furthermore do regular market research on the death, disability and funeral benefits, to offer you the most competitive rates and best policy conditions in the market.  This way we ensure costs are kept to a minimum, to maximize the portion of the monthly contributions invested for retirement funding.  Because we take care of administration only, we are totally independent and are therefore in a position to design the best possible product for your business. This ensures that the largest part of your contributions is invested for the benefit of your employees at retirement.  There is no other similar product that has this unique feature.

Flexibility

Available Plans

The Fund is very affordable, as illustrated in the enclosed table - you can choose the most suitable plan for each employee according to his or her needs and salary.

Plans C - J offer retirement, death, disability and funeral benefits. Junior employees can therefore be placed on plans providing basic benefits and senior employees on plans providing more comprehensive benefits.

Additional Contributions

The flexible structure of the Fund allows you to contribute more than the specified contribution for each option if you wish to do so. This option is especially recommended for older employees for whom no provision for retirement funding has been made. The additional contribution will be allocated directly to the member's investment account to create additional retirement funding.

Administration of the Fund and the Group Life Scheme (Death and Disability Benefits)

The administration of the fund and the Group Life Scheme (Death and Disability) is executed in the Pretoria office of Absa Consultants and Actuaries as contracted by the trustees of the fund.  ABSA Consultants and Actuaries handle the day to day member administration, which includes the loading of new members, processing of withdrawals and the payment of benefits.  It happens from time to time that employers or intermediaries contact the Fund telephonically with the request to amend member records or to withdraw or add members.  Take note that the Fund can only respond to requests in writing.  This is done to protect the members, employer and the Fund against any claims due to incorrect transactions. 

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