The money you have saved in the Fund is there to help provide an income when you retire.
Your normal retirement age is 65 years.
You have some options of what to do with your retirement benefit when you retire from the University:
1. Defer receiving your retirement benefit by:
- Keeping your retirement benefit in the Fund (you become a deferred retiree); or
- Transferring your benefit to a retirement annuity fund or preservation fund.
2. You can start receiving a pension income now by purchasing an annuity:
- Purchase one of the annuities from the Fund’s annuity strategy; or
- Purchase an annuity form any annuity provider that you choose.
3. If you want to start receiving a pension income now, you can also take cash:
- The options available to you at retirement as to how much cash you can take versus how much pension income you must buy depends how much of your benefit is “vested” and how much is “non-vested”. You can tell how much of your retirement benefit is vested or non-vested by looking at your benefit statement.
- You may take a maximum of vested part of your benefit plus one-third of the non-vested part of your benefit in cash. The rest must be used to buy a pension.
- How much of your benefit is vested depends on, among other things, your age on 1 March 2021 and when you joined the Fund. Please contact the Fund consultant if you are unsure.
If you elect to withdraw your benefit in cash, the benefit will be taxed according to the following tax table:
|R0 – R500 000||0%|
|R500 001 – R700 000||18% of the amount over R500 000|
|R700 001 – R1 050 000||R36 000 + 27% of the amount above R700 000|
|R1 050 001 and above||R130 500 + 36% of the amount above R1 050 000|
The Fund rules allow you to retire from age 55. If you retire early, the options are the same as when you retire at your normal retirement age. However, you would have saved less if you retire earlier than you would if you retire later.
It is generally not University practice to continue to employ staff beyond the age of 65. Should this be permitted by University Policy in special circumstances, the contribution to the Fund must continue to be paid via the University’s payroll system.
When you then retire, your benefit value will be equal to your full Fund credit at your late retirement date.
In the event of death whilst still a Fund member after age 65, a benefit is paid equal in value to your Fund credit at date of death.
It is important to note that all insured benefits cease from the 1st of the month following the month in which you turn 65.
You can defer your retirement from the Fund if you are 55 years or older:
You can defer your retirement from the Fund, by retiring from your employer, but leaving your retirement benefit invested in the Fund until you choose to take your retirement savings from the Fund.
If you choose this option, you will not be able to make further contributions and you will remain invested in the investment portfolio you were invested in before retirement (until you select another portfolio). You will not be entitled to insurance benefits from the Fund.
The investment return on your retirement savings will depend on the investment return on the portfolio(s) you are invested in.
Purchasing one of the Annuities in the Fund’s Annuity Strategy
The Fund’s annuity strategy has been put in place to help members who are not sure what to do with their retirement benefit at retirement and do not have access to financial advice on an appropriate retirement solution. When you reach retirement, you have the option to purchase a pension (that gives you a monthly pension income) as selected by the Board. You would still need to make the choice to select this option. Of course, you do not need to choose an annuity from the Fund’s annuity strategy at all, you can choose any annuity.
If you die while you are a member of the Fund, your dependants will receive:
- the greater of twice your annual RFI or your Fund credit, at the date of death, plus
- a monthly pension payable to your spouse or life partner of 40% of your RFI (if elected), plus
- monthly pensions payable to your eligible children of 20% of your monthly RFI, per eligible child, subject to a maximum of two eligible children (if elected).
Pensions are increased each year at the discretion of the Board, and continue to be paid until the earlier of:
- your spouse’s death or
- the date you would have attained age 65
- In the case of the children’s pension, payments will continue as long as the child is under age 21 (or 25 if still undergoing full-time education) and unmarried, or for life if the child is permanently incapacitated.
You may elect not to enjoy the spouse and/or children’s pension benefit in exchange for a greater monthly contribution towards retirement benefits. The option not to select the children’s benefit is conditional on you having no eligible children.
Additional Life Cover
There is an opportunity for members of UWRF to obtain additional life cover. Cover may be selected in multiples of your RFI from once to eight times. Cover ceases at age 65, or if you leave Wits before then, although there is an option to continue with the cover on an individual basis.
Once you have joined, you must stay on the Additional Life Cover Scheme until 1 January the following year, when you may decide to cancel the additional cover, keep your election the same, increase your election (but only by an extra one times), or you may decrease your election by any multiple. An exception is a life-changing event being marriage, divorce or the birth of a child. On one of these events a member may increase or decrease your election by any multiple. If you leave the Scheme on 1 January or upon a life-changing event, you are not permitted to rejoin the Scheme at a later date.
In the event of your death, payment will be made in accordance with your wishes expressed in your UWRF Beneficiary Nomination Form, or you may complete a separate nomination form.
Your Death Benefit Is Allocated
The law says that the Board must decide how to divide your lump sum death benefit between your dependants and your nominees if you die while you are a member of a Fund. The Board needs to find out who all your dependants are and who you have nominated to receive some of the death benefit, and then decide how to pay the benefit fairly. They have a duty to share the death benefit fairly and focus on providing for your dependants. The Board must decide who to pay, how much to pay each person and how to pay them.
It’s important to keep your dependants and nominees form up to date. Please click here for the nomination of beneficiary form.
The Board will consider the dependants and nominees form that you completed when they make their decision on how to share the death benefit. The Board uses this form to see what your wishes were. They use the details on the form as a guide when they are allocating the death benefit. They do not have to follow your wishes.
If you keep the dependants and nominees form up to date, it will make it easier for the Board and your employer to establish who your dependents and nominees are. If the form is out of date, the Board might make a decision that is different from what you would have wished. It is a good idea to update the form when there is a big change in your life – for example when you get married, divorced or have a child.
You are covered by an insurance policy that pays a monthly income benefit if you cannot work because of illness or injury. The policy pays out if you become disabled in the opinion of the insurer before normal retirement age. It does not matter if you become disabled after hours or at work. The monthly disability income benefit is paid if you become disabled and the insurer accepts the claim.
The insurer will monitor the level of disability and determine if you remain disabled, both at the outset and later. The insurer assesses your ability to perform duties at work, not to find work.
The benefit that has been insured is 70% of your monthly Retirement Funding Income, limited to a maximum of R240,000 per month.
A member shall be regarded as disabled if, in the opinion of the insurer, injury or illness has rendered him totally incapable of engaging in his own job with his own employer at the date of disablement or any other reasonably suitable job that his employer can offer him. 24 months after the date of disablement, the insurer will assess whether or not the claimant is then capable of engaging in any job for which he is or could reasonably be expected to become qualified or suited taking into account his knowledge, training, education, ability, experience & age.
The disability benefit will not be paid out immediately. The insurer must first assess the disability. This is called the waiting period. Payment in the waiting period will depend on the employer’s policy. The insurer is only responsible for paying the monthly disability income benefit once the waiting period is over. The waiting period is 3 months and starts from the date of disability.
It is important to note that contributions to the Fund will continue to be made whilst you are on disability claim.
The funeral insurance pays a benefit if you, your spouse or one of your children dies, to assist with funeral arrangements.
The benefit payable is:
|Member or spouse||R25,000|
|Child age 14 – 21||R25,000|
|Child age 6 – 13||R12,500|
|Child age 0 – 5||R 6,250|
In order to ensure that the Trustees apply consistent and equitable rulings in deciding upon any contentious claims lodged by the “spouse” of a deceased member, the following guidelines shall be used by the Trustees in determining whether the “spouse” claiming the benefit is entitled to such benefit
- Did the member elect to participate in the optional spouse’s benefit?
- Was the “spouse” nominated by the deceased member in writing?
- Is there evidence of a relationship between the deceased member and the “spouse” where such relationship was of a long-term nature and built upon mutual dependency and trust? Examples would include joint bank accounts, joint ownership of property, and long-term cohabitation etc.
- Is there any other evidence of a relationship such as a nomination of the “spouse” as a beneficiary in terms of the deceased member’s last will and testament?
- Was the “spouse” recorded as a beneficiary in terms of the deceased member’s medical plan?
Note: In cases where the medical plan makes no provision for a member and spouse of the same gender, such absence of recognition as a “spouse” shall not prejudice, reduce or limit the rights of the “spouse” under this practice note.
- Had the deceased member and the “spouse” drawn up any other legal document which would support the claim to spouse’s benefits?