Absa Small Business Provident Fund

absa Small Business Provident Fund

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This unique Provident Fund from Absa offers Small Business Owners (home owners and body corporate's) and their employees Retirement, Withdrawal, Disability and Funeral Benefits in one package

Benefits for you, the employer

• Retain your valuable employee
  

  Employee benefits minimize the risk of losing valuable employees.  You can be assured of retaining your current staff and being able to offer an attractive, competitive package to all new employees.

• Tax
  

  The employer's contribution to the Provident Fund is tax deductible to a maximum of 20% of the total salary roll. The employee derives no tax benefit from contributions in terms of the Income Tax Act. 

• Peace of mind
  

  The responsibilities of the employer at the retirement and unforeseen death or disablement of his employees are reduced due to provisions in a tailor-made specialist fund.

• Transferable bene5fits
  

  The accumulated value in the Fund for each member is transferable to another approved fund without tax implications.

• Ease of payment
  

  Contributions are levied monthly in advance, and to make life easier for you, these are done by debit order. The single contribution covers all the benefits of the Fund, including those offered through the separate group schemes.

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Benefits for the employee

• Retirement Benefit
  

  At retirement at any age between 55 and 70, the member will receive the accumulated value (net contributions plus interest) in the Fund as a lump sum or, if preferred, a portion or the full value paid by means of a monthly pension. The member's risk benefits, i.e. death, capital disability and funeral cover, will cease.

• Resignation Benefit
  

  Upon termination of service with an employer, the member's risk benefits, i.e. death, capital disability and funeral cover, will cease. The member is entitled to the accumulated value in the Fund (net contributions plus interest) and this benefit can be taken in cash or it can be transferred to a Preservation Fund or a Retirement Annuity.  Alternatively the accumulated credit can be transferred to another fund offered by the new employer.

• Death Benefits
  

  In the event of death before retirement, the member's dependents and/or beneficiaries will receive benefits from the Fund and the separate group schemes according to the rules.

  • Provident Fund
    

    From the Provident Fund the dependants of the deceased will receive a cash benefit. This cash benefit will consist of the accumulated value in the Fund (net contributions plus interest) and this will be payable to the dependants of the member as prescribed in Section 37C of the Pension Funds Act. Section 37C requires of the Fund, through the employer, to trace all dependants, and to evaluate their degree of dependency on the member before any benefit may be paid. This is a timeous process.

  •  Separate Group Scheme

    In the event of death of the principal member before retirement, the member's dependents and/or beneficiaries will receive a cash benefit from the separate group scheme. This benefit is paid in cash as directed by the employer, and is paid after receipt of all the required claim documentation by the administrator of the Fund. The cash benefit will consist of the death cover offered by the chosen plan as well as the funeral benefit.  Death cover is provided without any medical examinations until age 65. Any person who joins the Fund on a plan providing death cover of R75000 or higher, may be required to provide medical evidence of health prior to cover being granted by the insurer. Should this be required, such person will be informed in writing by the administrator, and provided a reasonable time in which to submit such required evidence of health. In the event of the death of a member's spouse or child (under the age of 21), a funeral benefit will be payable to the member according to the applicable option.

  • Waiting period applicable to death benefits under the Separate Group Schemes

    All new members joining The Absa Small Business Provident Fund will be covered for death and funeral benefits, but only after three months continuous membership if the cause of death was natural.  In the event of accidental death, the benefit is payable immediately.  This waiting period is designed to protect the members of the fund by managing the payment of the benefit.  Should a death claim thus arise due to natural causes within the first three months of membership, the death and funeral benefit will not be payable. 

• Total and permanent disability
  

  Should an employee become totally and permanently disabled (as determined by the insurer based on detailed medical evidence submitted) before the age of 65, he or she will receive benefits from the Fund and the separate group schemes according to the rules.

  • Provident Fund

    From the Provident Fund the member will receive a cash benefit. This cash benefit will consist of the accumulated value in the Fund (net contributions plus interest).

  • Total and permanent disability in the Separate Group Scheme

    The member will receive a cash benefit equal to the total of the disability cover offered by the chosen plan on approval of the claim by the insurer, after a waiting period of six months. If the onset of disability occurs within 5 years prior to the member's attainment of age 65, the amount payable will be reduced by 20 percent of the disability benefit offered by the chosen plan, for each year or part thereof by which the onset of such disability precedes the member's 65th birthday. Please note that pre-existing conditions apply. This means that a member cannot claim for a medical condition that existed 6 months prior to his commencement date in the Fund within a 12 months period after this commencement date.

• Important Notices
  • Participation in an approved fund

    Once you have become a participating employer in the Fund, you are not permitted by law to withdraw from the Fund. You are however permitted to transfer membership to another approved fund, or in certain circumstances have your participation in the Fund liquidated.

  • Payment of contributions
    

  The payment of contributions to a fund is prescribed by law. The onus is on the employer to ensure that monthly contributions are paid via the debit order system, and that funds are available for the successful allocation of contributions. Contributions must be received by the Fund on or before the 7th of a month, and if the 7th is on a Saturday, Sunday or Public Holiday, then on the last working weekday before such a day.  Should your payment via the ACB debit order system be rejected for whatever reason, you as employer will be liable for the payment of interest at a rate determined by the Minister of Finance from time to time. The Fund will correspond directly with you should this be necessary.

  Please note that all communication for changes to the membership must be received by the Fund in writing before the 20th of the month.  The relevant changes will then be made to the system before the debit order run on the 1st of the next month.

  • Risk Cover
    

    Should a monthly contribution not be received in any one month, the risk cover will terminate if the overdue contribution is not paid through a double debit in the following month.  If the double debit is rejected, those members will then not be covered for death, capital disability or funeral benefits as from the first day of the first month for which no contributions were received. Absa Consultants & Actuaries will issue an ‘off-risk’ letter to the employer confirming the cessation of risk.  If arrear contributions are received subsequently, members will be subject to the waiting periods described above from the date the contribution is re-instated. Contributions and risk benefits cannot be re-instated retrospectively.

  • War and Riot Exclusions

    There are war and riot exclusions and terms and conditions may vary from time to time. 

Click here for more absa small business provident fund information and how to apply

Benefit and Contribution Structure

Plan	Inv	C	D	E	F	G	H	I	J
	R	R	R	R	R	R	R	R	R
Contribution p.m.	108.00	108.00	145.00	210.00	290.00	500.00	700.00	980.00	1180.00
Death Cover	-	10 000	15 000	25 000	50 000	75 000	100 000	150 000	200 000
Capital Disability Cover	-	10 000	15 000	25 000	50 000	75 000	100 000	150 000	200 000
Funeral:	-
Member	-	7 500	10 000	10 000	10 000	10 000	10 000	10 000	10 000
Spouse	-	7 500	10 000	10 000	10 000	10 000	10 000	10 000	10 000
Child 14 - 21	-	3 750	5 000	5 000	5 000	5 000	5 000	5 000	5 000
Children 0 - 13	-	2 625	3 500	3 500	3 500	3 500	3 500	3 500	3 500
Total cost	16.16	47.96	65.81	91.58	144.23	215.23	285.15	367.90	450.40
Net Retirement savings	91.84	60.04	79.19	118.43	145.78	284.60	414.85	612.10	729.60

Minimum Contribution and Separate Scheme Structure as from 1 August 2009 - 31 July 2010

Inv = Investment only

Expected Retirement Benefit (age 65)

Entry Age	Plan 1 (Inv) R108		Plan 3 (C) R108		Plan 4 (D) R145
	0%	5%	0%	5%	0%	5%
20	444,201	878,638	290,395	574,406	383,017	757,615
25	297.727	562.552	194,638	367,766	256,718	485,067
30	198,039	355,100	129,467	232,145	170,762	306,189
35	130,194	219,922	85,113	143,773	122,261	189,630
40	84,019	132,631	53,927	86,707	72,446	114,362
45	52,593	76,912	34,383	50,281	45,349	66,318
50	31,205	41,881	20,400	27,380	26,907	36,112
55	16,649	20,305	10,884	13,274	14,356	17,508
60	6,742	7,395	4,408	4,835	5,814	6,377

 

Entry Age	Plan 5 (E) R210		Plan 6 (F) R290		Plan 7 (G) R500
	0%	5%	0%	5%	0%	5%
20	572,809	1,133,026	705,092	1,394,685	1,376,521	2,722,783
25	383,927	725,426	472,590	892,954	922,617	1,743,275
30	255,377	457,911	314,353	563,660	613,698	1,100,409
35	167,888	283,595	206,660	349,088	403,453	681,509
40	108,344	171,031	133,365	210,529	260,363	411,006
45	67,820	99,180	83,482	122,084	162,979	238,339
50	40,240	54,007	49,533	66,479	96,701	129,784
55	21,469	26,184	26,427	32,231	51,593	62,923
60	8,694	9,537	10,702	11,739	20,894	22,918

Entry Age	Plan 8 (H) R700		Plan 9 (I) R980		Plan 10 (J) R1180
	0%	5%	0%	5%	0%	5%
20	2,006,500	3,968,891	2,960,536	5,855,992	3,528,847	6,980,120
25	1,344,862	2,541,103	1,984,308	3,749,328	2,365,220	4,469,057
30	894,563	1,604,022	1,319,904	2,366,691	1,573,275	2,821,006
35	588,097	993,409	867,721	1,465,748	1,034,291	1,747,116
40	379,521	599,107	559,973	883,966	667,467	1,053,654
45	237,568	347,418	350,525	512,606	417,813	611,006
50	140,957	189,181	207,978	279,132	247,902	332,714
55	75,205	91,720	110,963	135,330	132,264	161,308
60	30,456	33,406	44,937	49,290	53,563	58,751

 

1. The returns are not guaranteed, but are only projections.

2. It is expected that premiums will rise by 5% per annum.

3. It is expected that the investment return will be 8%.

4. This projection is for illustrative purposes only.

5. The nett contributions were used to clsulate the projections.

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