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Your Fund

It is important that all members understand the benefits which the Fund offers you and the investment strategy implemented by the Trustees.

Contributions

The table below details the current contribution rates:

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* This premium is not payable after age 60 as the Disability cover ceases at 60.

Benefits

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Definitions

Pensionable Age: 65 years, with early retirement allowed from age 55.

Pensionable Service: Period of Service with the Local Authority for which contributions were paid, plus Bonus Service as per the Rules.

Pensionable Emoluments (PE): The remuneration of the member in terms of the Rules of The Fund. For the purposes of this report, the PE has been referred to as pensionable salaries.

Final Pensionable Salaries (FPE) for Category A members: Annual Average Pensionable Salary during the last two years of Pensionable Service. For C-members annual pensionable salary increases are declared by the actuary on an annual basis.

Member’s Share ( Category B and C): The amount transferred on conversion plus net retirement contributions and investment returns.

Summary of the various benefits

Retirement Benefits
A-members

Pension (at 65):
2.5% of FPE for each year of Pensionable Service. Members may commute pension for cash but certain rules apply for members younger than age 55 on 1 March 2021.

Gratuity (at 65):
7.72% of FPE for each year of Pensionable Service.

B-members

Member’s Share is available to secure a pension.
Commutation options are available.

C-members

Deferred Benefit:
The pension and gratuity are based on FPE for A-members.

Defined contribution:
Member’s Share is available to secure a pension. Commutation options are available.

Death After Retirement
A-members

A spouse’s pension of 75% of the members pension if death occurs after age 58.

B-members
C-members

A spouse’s pension of 75% of the members pension if death occurs after age 58.

Death In Service
A-members

Lump Sum:
1.5 times Pensionable Salary (Provided member under age 60) plus the Gratuity outlined above.

Spouse’s Pension:
1.2% of Pensionable Salary based on prospective Pensionable Service to age 60.

Children’s pensions are also payable in certain circumstances.

B-members

Member’s Share, plus 5 times Pensionable Salary if death occurs prior to age 60.

C-members

Defined Benefit:
The pension and gratuity as for A-members.

Defined Contribution:
Member’s Share, plus 5 times Pensionable Salary if death occurs prior to age 60.

Important Note

Please note that the lump sum death benefits are subject to tax. Therefore, the tax will be deducted before the benefit is paid out.

Your lump sum death benefits are paid according to the Pension Funds Act. All factual and financial dependency on you is considered when determining the distribution of your death benefits. The Trustees of the Fund are responsible to decide on the allocation and distribution of your death benefits.

Please ensure that you have completed your beneficiary nomination form. Although the Trustees determine the allocation according to your financial and factual dependents, they are obliged to take your wishes into account when they make this decision.

Without a completed form, your wishes cannot be considered!

You can submit your completed form to the Principal Officer at hazel@axiomatic.co.za or the Front Office at freepen@e3.co.za.

Voluntary Exit - prior to retirement (not death)
A-members

Member’s contributions plus 6% for each year of Contributory Service including Bonus Service increased by 20% for each complete year of Pensionable Service in excess of five years to a maximum increase of 200%; provided that for a Member with five or more years Pensionable Service this amount may be further increased by the Executive Committee after consulting the Actuary.

This benefit is subject to the Minimum Individual Reserve as outlined in the legislation.

B-members

Member’s Share
This benefit is subject to the Minimum Individual Reserve as outlined in the legislation.

C-members

Deferred Benefit:
As for A-members

Defined contribution:
Member’s Share- this benefit is subject to the Minimum Individual Reserve as outlined in the legislation.

Investment Strategy

Our investment strategy encompasses patience, discipline, and perspective, focusing on long-term and income protection.

Our asset allocation process is designed to achieve optimal sustainable long-term investment returns at a level of risk, that the Board considers acceptable, and which is cognisant of our pay-out obligations.

A liability-driven investment approach is followed, which addresses interest rate risk, inflation risk, mortality risk, and longevity risk combined with a multi-portfolio “life stage” approach with each portfolio having different return objectives and risk characteristics.

Asset liability modeling is used to set the asset allocation for each portfolio, a process designed to achieve optimal sustainable long-term investment returns at an acceptable level of risk, and which is cognisant of our pay-out obligations.

Risk is managed through position sizing and a well-diversified multimanager investment structure spread across geographies, asset classes, and within asset classes. Investments are approached in a responsible manner, incorporating sustainability considerations.

Investment managers are monitored dynamically, including a comparison to benchmark and peer groups.

Regulation 28 is compliant at the member and Fund levels.

Investment Objectives

Category A members

Category A Members are invested in a combined portfolio made up of Growth assets and a liability-driven strategy to match the investment strategy post-retirement. The overall strategy is to ensure the fund holds sufficient assets to support the retirement benefit for Category A members.

Category B and C members

Category B Members and the part of Category C Members which are in the defined contribution structure are invested in the Life Stage Model, which consists of:

Growth Portfolio

The Growth Portfolio focuses on long-term capital growth and aims to achieve returns of inflation plus 5 over 5-year periods.

This portfolio is utilised to manage members’ assets that are more than 5 years from retirement. In other words, all members aged 60 years or younger will be fully invested in this portfolio.

Conservative Portfolio

The Conservative Portfolio has more of a focus on capital protection given the shorter investment horizon (members are closer to retirement age). In addition to the primary objective of protecting capital, the portfolio will aim to achieve returns of inflation plus 3 over 3-year periods

This portfolio is utilised to manage members’ assets that are less than 5 years from retirement.

LIFE STAGE MODEL

Category B and C members

Recently, the Trustees have introduced a Life Stage model for B and C members.

The Life Stage model aims to consider the different risks and needs of investors close to retirement (5 years or less to retirement) and younger members still further from retirement age (more than 5 years). Because of the distinct difference in the risk appetite of members close to retirement (5 years or less) and younger members (more than 5 years from retirement), there are two separate portfolios utilised for both Category B and C members.

Two Separate Portfolios

This portfolio is utilised to manage members’ assets that are more than 5 years from retirement.

In other words, all members aged 60 years or younger are fully invested in this portfolio.

This portfolio is more focused on capital protection and in addition to the primary objective of protecting capital, the portfolio still aims to achieve returns of inflation plus 3% over 3-year periods.

This portfolio is utilised to manage members’ assets that are less than 5 years from retirement.

The table below explains how the life stage works:

Up to age 60

100% Free State Growth Portfolio.

Capital Accumulation.

Age 60 to 63

Transition quarterly over a 3-year period.

From age 63

100% Free State Conservative Portfolio.

Capital Protection.

The life stage is a default strategy whereby all members below the age of 60 will be 100% invested in the growth portfolio.

When a member reaches the age of 60 (5 years prior to retirement) they will enter the default life stage. In the default life stage, on a quarterly basis and over a 3-year period, members will (in equal percentages) be automatically switched from the growth to the conservative portfolio.

When a member reaches the age of 63, they will be 100% invested in the conservative portfolio and remain invested in that portfolio for the last 2 years until their retirement date. The life stage model happens automatically and does not require members to make any decisions.

It is important to also consider that some members may have different needs from others and therefore the option to not participate in the default life stage is provided for. Should a member wish not to participate in the default (de-risking into the conservative portfolio), the option to “opt-out” will be available to the members. In other words, if a member wished to stay invested in the growth portfolio up until their retirement date, such a member will be afforded the opportunity to exercise that option.

Where members do not explicitly “opt-out” of the default, they will remain in the default de-risking strategy until retirement.

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POPIA

Handling Your Personal Information

How does the Fund handle your Personal Information?

By now you will no doubt have received numerous emails from businesses updating you on how they are complying with the Protection of Personal Information Act (POPIA) which came into full effect on 1 July 2021.

Together with our Service Providers to the Fund in providing you with retirement funding benefits, we have security measures in place to safeguard your personal information when communicating with the Employer and you as a Member. This is to comply with POPIA which is a law that enforces a person’s constitutional right to privacy by regulating the collection, use, sharing, storage, and destruction of personal information.

What do you need to know about your Personal Information and the Fund?

Security measures will apply to all recipients of our communications, this means you and the Employers. We will never send emails that have personal, identifiable information in the main text. Instead, we will include the personal information in secure PDFs attached to the email.

This means that the recipient will need a password to open the attachment and view the communication. The password will be a decryption key specific and familiar to the recipient of the document, meaning that all recipients will receive a password in a separate email in order to access the password-protected document.

Object personal information processing

Should you object to the processing of your personal information, please complete the following form:

Delete/correct personal information

Should you wish to delete or correct your personal data, please complete the following form:

PAIA

Promotion Of Access to Information Act (PAIA)

The purpose of PAIA is to give effect to the constitutional right of access to information held by any private or public body that is required for the exercise or protection of your rights.

PAIA provides you with the right of access to information held by public and private bodies when you request such information in accordance with the provisions of PAIA, for the exercise or protection of any of your or another person’s rights.

If you make such a request, a public or private body must release the information unless PAIA or any other relevant law, states that the records containing such information may not be released.

The Funds PAIA Manual is detailed below:

COOKIE POLICY

Welcome to our website.

1. Introduction

This Cookie Policy explains how we use cookies and similar technologies on our website www.vrystaat-munisipale-aftreefonds.co.za. This policy is designed to help you understand what cookies are, how we use them, and the choices you have regarding their use.

2. What Are Cookies

Cookies are small text files that are stored on your device (computer, tablet, or mobile phone) when you visit certain websites. They are widely used to enhance your online experience by remembering your preferences and actions over time. Cookies are not harmful and do not contain personal information like your name or payment details.

3. How We Use Cookies

We use cookies for various purposes, including:

  • Essential Cookies: These cookies are necessary for the basic functioning of our website. They enable you to navigate our site, use its features, and access secure areas.
  • Analytical/Performance Cookies: These cookies help us understand how visitors use our website. They provide information about which pages are visited most frequently, how long visitors stay on each page, and whether they encounter any error messages. This data helps us improve the performance and usability of our website.
  • Functionality Cookies: These cookies allow our website to remember choices you make (such as your username, language, or region) and provide enhanced, personalised features.
  • Targeting/Advertising Cookies: These cookies are used to deliver advertisements that are relevant to your interests. They may also limit the number of times you see an ad and help measure the effectiveness of ad campaigns.

 

4. Your Cookie Choices

You have the option to manage your cookie preferences. You can usually modify your browser settings to accept, reject, or delete cookies. Please note that if you choose to block or delete cookies, some features of our website may not function properly.

5. Third-Party Cookies

We may allow third-party service providers to use cookies on our website for the purposes outlined in Section 3. These providers may also collect information about your online activities over time and across different websites.

6. Updates to This Policy

We may update this Cookie Policy from time to time to reflect changes in technology, law, or our data practices. Any changes will become effective when we post the revised policy on our website.

7. Contact Us

If you have any questions about our Cookie Policy or how we use cookies on our website, please contact us at freepen@e3.co.za

By continuing to use our website, you consent to the use of cookies as described in this Cookie Policy.

Complaints Policy

Introduction

An essential aspect of the governance of the Fund is that complaints are managed properly.  This is also one of the outcomes of the Treating Customers Fairly initiative of the Financial Sector Conduct Authority which is applicable to all retirement funds. In what is set out below the process for managing complaints is set out.
For the purposes of this Policy, a complaint:

  • May be made by a member, former member, beneficiary or potential beneficiary (“a complainant”);
  • Is not an enquiry and must allege that an issue has not been dealt with correctly, either in terms of the Fund’s rules, or according to reasonable standards of practice;
  • May relate to any Fund issue which affects the complainant, including conduct, and whether or not the complainant is or may potentially be prejudiced financially;
  • Must be against the Fund only, even where it relates to what service provider to the Fund has or has not done.

The Fund must deal with a complaint as follows:

  1. A complaint must be directed to the Principal Officer | Email: Hazel@axiomatic.co.za. The Principal Officer may refer the complaint and/or query to the relevant department or service provider.  If the complaint relates to the Principal Officer then the Principal Officer must refer it to the Chairperson of the Board of Trustees to manage, with the process following to apply in the same way to the responsibility of the Chairperson to resolve the complaint.
  2. A complaint may only be made in writing and sent by email to the Principal Officer. The complainant should include all relevant information and attach relevant documentation.
  3. The Principal Officer must acknowledge receipt of the complaint in writing within five working days of receipt, and give the complainant the name(s) and contact details of the person(s) responsible for the resolution of the complaint. The complainant must also be provided with the expected timelines involved in resolving the complaint, as well as the name and contact details of who the complainant can contact if they are dissatisfied in the way the complaint is being handled.
  4. The Principal Officer must ensure that there is a proper investigation of the complaint, if necessary involving the assistance of a service provider to the Fund (including the Fund’s actuary and legal adviser), in order to ascertain:
    4.1 If the complaint can be resolved immediately, to take the necessary action and advise the complainant accordingly in writing.
    4.2 If the complaint cannot be resolved immediately, to send the complainant a written summary of the steps to be taken to resolve the matter and the expected date of resolution.
  5. The Principal Officer may require a service provider to manage the complaint on behalf of the Fund provided that such service provider is given a clear mandate that sets out what it is authorised to do and how regularly it must report to the Principal Officer.
  6. If the Principal Officer is unable to resolve the complaint the he or she must notify the complainant giving full written reasons and notify the complainant that they may seek legal redress by referring the complaint to the office of the Pension Funds Adjudicator (www.pfa.org.za) or in some other way.
  7. The Principal Officer must record the date and details of the complaint in the Complaints Register  with details of how it was managed and whether or not resolved.
  8. The Principal Officer must request, at least on a quarterly basis, Fund reports from the service providers (including the benefit administrator, actuary and legal adviser) regarding details of complaints referred to them and how they have been managed on behalf of the Fund.

Escalation Process

  1. If the complainant is not satisfied with the management of the complaint or how it has bene managed, the complainant may request in writing that the matter be escalated to the Board of Trustees, for review and decision.
  2. If the Board of Trustees may take such steps as it considers appropriate to resolve the complaint, and must provide the complainant with full written reasons for its decision which, if not resolved as the complainant requires, includes informing them that they may seek legal redress by referring the complaint to the office of the Pension Funds Adjudicator.