Pension and Provident  Funds
 
 
- It provides retirement benefits for your employees.
- It can pay death, disability, severe illness or funeral benefits when an unforseen event happens to an employee
 
The difference between a Pension Fund and a Provident Fund
 
 
Pension Fund
Provident Fund
Retirement Annuity
 
Who contributes
Employee and Employer
Employer or Employee
The Individual
 
Tax Benefit on  withdrawal
Taxable in employees name
Taxable in employees name
Taxed on retirement
 
Amount eccessible at resigniation
All - but taxable
All - but taxable
No withdrawal on resignation allowed
 
Amount eccessible on retirement
1/3 as cash, the rest as income
1/3 - might be taxed
 
100%
1/3 as cash, the rest as income
1/3 - might be taxe
 
 
 
Benefits of a Pension or Provident Fund in Detail
 
   -  Withdrawal benefits, the same as on a retirement annuity, more details..
   -  Retirement benefits, the same as on a retirement annuity, more details..
   -  Insured benefits, including benefits paid to a worker who is disabled and benefits paid to the dependants of a worker who dies.
   -  Tax Benefits: A employer can deduct contributions as expenses.
   -  A pension or Provident fund brings loayalty from a amployee.

 
Types of Pension and Provident Funds
 
 Umbrella Funds
The more popular kind of pension fund
It is a pension fund where more than 1 employer makes contributes. 
It's advantage is that the costs are lower than stand alone pension funds.
This scheme is set up to provide retirement, death and other benefits to members of participating employers.
In an umbrella fund there are several participating employers who enjoy more or less the same benefits in the same fund structure and this fund is managed by professional trustees.
in the structure and size of one umbrella fund the costs on average per member are reduced  and the umbrella fund can also provide other advantages such as professional governance and regulatory requirements, to oversee the funds belonging to the employees.
 
Who should consider an umbrella fund?
 
 An umbrella fund is appropriate for all employers who lack  the size to extract the scale of benefits from a stand-alone fund.
 The South African retirement industry is heading strongly in the direction of umbrella funds: the number of stand-alone retirement funds in South Africa has almost halved over the past few years, mostly because of costs.
 Employers that want to give their employees better security at the work place as compensation or a way to save for their retirement will benefit in a great way though umbrella funds.
 
Stand Alone Pension or Provident Fund
 
Only one employer makes contributions to it.
The contributing employer makes the rules and benefits and have control over it.
It is a more expensive option than a umbrella fund.
        
 
 


Contact Us
 
Tel Number:        082 494 5624 or 012 547 3769
Email:                  info@bluecare.co.za
Facebook: www.facebook.com/BluecareInsuranceBrokers
 
About Bluecare Insurance
 
We are a registered Financial Service provider with the FSB
 
We are registered to provide
   * Long Term Insurance
   * Short Term Insurance
   * Pension and Provident Funds
   * Investments
   * Medical Aid
 
   Registration number 25405.