The default regulations for retirement funds, issued in 2017, required large scale upgrades to retirement fund administration processes. Our Administrator continues to make refinements to the processes and we provide an update on this herewith.
The regulations explicitly focus on two major events in members’ lives being, when an employee becomes a member of a retirement fund and when a member terminates his or her service with their employer. The Sanlam Umbrella Fund and the Sanlam Unity Umbrella Fund have complied with these requirements by offering Trustee-approved default investment strategies for new members joining the fund and by offering the Living Annuitant, Paid-up and Phased Retiree membership options when member terminate their service with the employer or each retirement.
While the Living Annuitant and Phased Retiree options allow for a seamless transition into retirement, the trustees have noted a number of challenges for the administration of members who leave employment without providing the fund with an official instruction on the payment of their benefit. The Pension Funds Act Default Regulation 38 states that members who leave employment before retirement be made paid-up. The trustees of the Sanlam Umbrella Fund and Sanlam Unity Umbrella Fund have therefore made provision for two groups of paid-up members; i.e. Elected Paid-up members and Defaulted Paid-up members. As required by legislation, the rules of the fund will still apply to both the Elected Paid-up members and Defaulted Paid-up members, it is only the manner in which these members are administered which differ slightly. For more detail on the administration process of these members, click here.