The Trustees of the Sanlam Umbrella Fund, together with their supporting committees, have outlined how the Fund will comply with these regulations which require the following:
- Establish a default investment strategy
- Establish a method of preservation and portability
- Establish an annuitisation strategy that would be appropriate for their members
Regulation 37 requires that a fund offer its members a default investment portfolio, which is not excessively complex or unreasonably expensive.
The Sanlam Umbrella Fund has since its inception in 2008 offered a default investment strategy for members, which is regularly reviewed by the Trustees of the Sanlam Umbrella Fund. In fact, currently the Sanlam Umbrella Fund offers 4 trustee-approved strategies that cater for different client preferences and the needs of participating employees. The 4 trustee-approved strategies are:
- Sanlam Lifestage Strategy
- Volatility Protection strategy
- Passive Lifestage strategy
- Sanlam Blue Lifestage strategy
Regulation 38 requires that a fund offers its members the option of preservation and portability when leaving the service of their employer.
The Sanlam Umbrella Fund allows members, upon leaving their employer, the option to remain invested in the Fund via the In-Fund preservation option. This allows members to remain invested in the investment strategy or portfolios (within the open menu) they were invested in upon exit from employment, while still enjoying the benefits of economies of scale the umbrella arrangement offers, plus having the option to switch to other portfolios within the open menu range.
Further, in line with the regulations, members who terminate service before retirement will become paid-up in the Fund, until the Fund is instructed by the member in writing to make payment of or transfer his/her benefit. This process will be facilitated by allowing members to confirm their instruction either by signing a manual form, confirming via the app or member portal, or via sms.
Regulation 38 also requires that members have access to retirement benefit counselling before their withdrawal is processed. The Sanlam Umbrella Fund offers all its members this service, at any time, through the Administrator’s Individual Member Services platform.
This service offers all members of the Fund much needed information to assist them in every step of their retirement savings journey, enabling members to make well informed decisions about their retirement savings.
Regulation 39 requires that a retirement fund offers its members an annuity strategy
The Trustees of the Sanlam Umbrella Fund have endorsed an annuity strategy that complies with regulatory requirements and will be available to all members of the Fund. The annuity strategy provides sufficient flexibility in terms of income and investments by offering both In-Fund and Out- of-Fund options:
- The Trustee endorsed In-Fund living annuity
- Fully compliant with Regulation 39
- One investment portfolio – Sanlam Lifestage Capital Protection Preservation Portfolio
- Fees of 0.05% of AUM per annum ex VAT to a maximum of R62.50 a month
- Financial advisors may be appointed to assist members and may earn the following fees:
- Once-off initial fee of up to 0.50% ex VAT of member share
- Ongoing fee of up to 0.75% per annum ex VAT of member share
- The extended range In-Fund living annuity
- Offers the full investment menu as available to active fund members
- Fees of 0.10% of AUM per annum ex VAT to a maximum of R125 a month
- Financial advisors may be appointed to assist members and may earn the following fees:
- Once-off initial fee of up to 0.50% ex VAT of member share
- Ongoing fee of up to 0.75% per annum ex VAT of member share
- The Out-of-Fund guaranteed annuity
A living annuity may not be best suited to all members, therefore the trustees have negotiated an institutionally priced guaranteed annuity that is available to members