Default Regulations are effective 01 March 2019
Summary of Default Regulations as it relates to members
Amendments to the Regulations issued under section 36 of the Pension Funds Act 24 of 1956 were published in the Government Gazette number 41064 in August 2017.
These amendments are also known as Default Regulations.
All Funds registered before 1 March 2018 will have to comply with the Default Regulation.
The Default Regulations require the board of trustees of the listed retirement funds to offer the following to its members
Defined Contribution: – A default Investment portfolio which is not excessively complex or unreasonably expensive.
Pension & Provident Funds: – A default in-fund preservation of benefits for members who move between employers before retirement.
Pension Preservation & Retirement Annuity Funds: A default annuity to ensure that members are able to convert their retirement savings into an income at retirement that is efficient, transparent and cost effective.
We are with you every step of your retirement journey – Fund defaults
Living Annuity Portfolio
Living Annuity Product Sheet
Retirement Counselling
In-house Annuity
National Treasury has already warned in 2012 that it may need to regulate the cost of retirement products, if the financial sector and Government cannot come to an agreement on the excessive high cost of pension funds and retirement products (such as living annuities and preservation funds). Pension products are expensive and, in many cases, confusing. This is what led to the new regulations, which place an obligation on the trustees of pension and retirement funds to offer default options to members. These products should be inexpensive and easy to understand. The above has led to legislation taking effect on 1 March 2019.
Retirement Benefit Counselling
The NJMPF has appointed in-fund solutions to provide retirement fund counselling for NJMPF members. The in-fund solutions will work in conjunction with the NJMPF client services team, to communicate and do counselling stakeholders about out enrolment default products offered by the NJMPF. The individual consultation will include detailed explanation about;
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The NJMPF annuity policy and summary policy info sheet
Definition of an Annuity
The fees
The risks
Investment structure
The drawdown rates
Declaration of existence
Calculation of Retirement benefit
Details of the Fund appointed benefit counsellor
Document – tick box format – which must be signed by the qualifying retiring member
And any other document as determined by the NJMPF policy and Pension Fund Act.
* An important notice is that retirement counselling is not providing financial advice as per FAIS Act.
The appointed counsellor will also liaise using his Fund approved system to counsel the active members approaching retirement. A report will be given to the Fund with signed proof of the counselling – all this done before one month of the retiring person exit the Fund. The signed document indicating proof of counselling will then be given to the client services supervisor who will then cascade it to the pensions department to allow the process of payment to commence. An Administrator to sit in during counselling session, with the member.
Default Preservation
The NJMPF will not put members in a preservation fund – but has created an autoenrollment account for deferred retirees who are withdrawing or exiting the Fund through ‘resignations, dismissals or retrenchments. The appointed in-fund solution consultants will conduct counselling for members exiting the Fund. Additional information which will be supplied to exiting members include but not limited to the following:
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The definition of a preservation fund
The investment manager fees
The risks
The cost by the Fund to the member who is paid-up
How the Fund will preserve your benefit should you choose to use the Fund’s presentation – deferral option
The option to transfer paid-up benefit to an external insure;
Annuity
Preservation
Investment
The other options to transfer which the member
Option to transfer your benefit to the new employer’s retirement (pension, provident, preservation and annuity) Fund
Leave your benefit with the Fund to become a deferred paid-up member
To complete claim form should member decide to be paid out.
Benefit statement with individual values
Details of the Fund appointed benefit counsellor
Document – tick box format – which must be signed by the qualifying retiring member
And any other documents as determined by the NJMPF and Pension Fund Act
* An important notice is that retirement counselling is not providing financial advice as per FAIS Act.
Default Investment Portfolio
The Fund has an investment policy which adheres to the requirements of Regulation 28 of the Pension Funds Act of 1956 and was established in accordance with PF Circular 130 issued by the Financial Sector Conduct Authority (“FSCA”) as far as this was practical and appropriate. The investment policy will form part of the default investment portfolio. On our website a factsheet has been uploaded to provide detailed information on the asset allocation.