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 Benefits

 
The UWC Retirement /Provident  Fund – a Defined Contribution (DC) fund and the UWC Grouplife Scheme

This guide provides an overview of the benefits to which you are entitled in terms of the UWC Provident Fund.

Reference is made to the UWC Grouplife Scheme in relation to insured benefits only (life cover and disability benefits).  These insured benefits are best understood if they are explained as a collective.  When we refer to the payments in case of death we also refer to the UWC payments made to the estate of the deceased.

The emphasis is on making the benefit as clear as possible, without necessary including all the legal terms and definitions.

Conditions incorporated in the formal UWC RETIREMENT FUND Rules will always overrule the information contained in this booklet.

Should you require any further information regarding these benefits, you should contact the Human Resources Department.

CONTENTS

  1. What is the UWC Defined Contribution Provident Fund?
  2. Who is eligible to join the Provident Fund?
  3. Contributions
  4. When do I retire?
  5. What is my benefit at normal retirement date?
  6. May I retire earlier than my normal retirement date?
  7. What benefit is payable if I become disabled?
  8. What benefit is payable if I die in service before normal retirement date?
  9. Process when a member die in service
  10. Disability benefit application
  11. Can I transfer amounts in from other funds?
  12. Full document

 

1. What is the UWC Defined Contribution (DC) Provident Fund?

A Provident Fund pays retirement benefits as a lump sum, (no monthly pension is paid from the Fund).   Retiring members may elect to purchase a pension from an external registered insurance company.  The final retirement value consists of accumulated contributions and the investment performance of the fund. 

A Pension Fund, unlike the UWC Provident Fund, compels members to take a monthly pension from the pension fund when they retire.  They may also opt to transfer their fund credit to another insurer and receive a pension from this (alternative) insurer.  A member may take (commute) up to 1/3 of the pension benefit to cash. At   resignation both the UWC Provident Fund and the UWC Pension pay the benefit in cash (subject to tax)


2. Who is eligible to join the Providen​t Fund?

It is compulsory for new permanent staff members to join the UWC Provident Fund (the UWC Pension Fund was closed for new members in 2006).  Contract staff members who qualify for membership to the UWC Provident Fund in terms of their employment conditions may also join the Provident Fund.


3. Contributions

On a monthly basis the Employer contributes 15% of a staff member’s remuneration (basic salary plus the annual bonus) to the Fund - 7.5% of remuneration is deemed to be contributed by the member.


4.  When do I retire?

You qualify for retirement on the last day of the month in which you turn 65.  Retirement at age 65 is compulsory.


5.  What is my benefit at normal retirement date?

You will be entitled to your Fund credit i.e. all accumulated contributions plus investment returns.


6.  May I retire earlier than my normal retirement date?

You may retire at any stage after 55 years of age.

 

7.   What benefit is payable if I become disabled?


Temporary disability

You will be entitled to an income from the disability scheme, payable after a waiting period of 6 months, equal to 75% of your monthly pensionable salary subject to an overall maximum benefit of R 76,100 per month until your normal retirement date. The disability benefit will increase annually based on inflation indicators.

Permanent Disability

In addition to the 75% income replacement benefit, you will also be eligible for a lump sum benefit of 3 x your annual salary.

The following table provides an overview of the insured benefits (life and disability cover) – The benefits are based on an employee earning a basic salary of R 12,000 pm (R 144,000 pa)

Please note: If you currently belong to the UWC Provident Fund and the UWC Grouplife scheme you can access the UWC S:Drive to click on the file named 'Insured  benefits UWC Provident Fund & Grouplife 2015 Example'  to see the specific benefits applicable to you.​

 

a.       Permanent Disability

 

Fund/Scheme

Benefit

Waiting period

Benefit Value

Provident Fund

Lump sum of  2 X annual basic salary

6 months

R 288,000

UWC Grouplife Scheme

Lump sum of  1 X annual basic salary

6 months

R 144,00

Total payment  is permanent disability is approved

R 432,000

 

b.       Temporary Disability – This monthly payment is in addition to any lump sum payment iro permanent disability.

 

Fund/Scheme

Benefit

Waiting period

Benefit Value

UWC Grouplife Scheme

75% of basic salary (maximum of R 76,100, inclusive of employer waiver) whilst being disabled, payable to the member

 

20% of the basic salary available to the employer to subsidise retirement fund contribution and medical aid

6 months

R 9,000

 

 

 

R 2,400

 

c.        Death benefit / Life cover – member in active service

 

Fund/Scheme

Benefit

Benefit Value

Provident Fund

Lump sum of  4 X annual basic salary

R  576,000

UWC Grouplife Scheme

Lump sum of  3 X annual basic salary

R   432,000

Total benefit ito life cover

R 1,008,000

 

d.       Death benefit / Life cover – member in receipt of disability benefits – this is in addition to any payment in terms of permanent disability

 

Fund/Scheme

Benefit

Benefit Value

Provident Fund

Lump sum of  4X annual basic salary

R  576,000

Capital disability cover

Lump sum of  2 X annual basic salary

R   288,000

Total benefit ito life cover

R  864,000

 

Treatment of the temporary disability benefit in the hands of the member

 

75% of basic salary

R 9,000

Less: Member contribution to the provident fund

(R 900)

Less: Member medical aid contribution (if applicable)

 

Less: Tax (the benefit is taxed as normal income)

 

Nett payment to the member

R 8,100


8.   What benefit is payable if I die in service before normal retirement date?

Your Fund credit becomes payable to your beneficiaries / nominees


9.   Process when a member dies in service

The following benefits are payable:

Any outstanding leave and pro-rata bonus – payable by UWC to the estate of the deceased

Death benefits in terms of the Provident Fund rules

Accrued retirement fund savings in the Provident Fund

Death benefits in terms of the UWC Grouplife scheme 

Process

The family will contact HR and they will have an initial discussion with relatives to ascertain the circumstances around the members’ passing, and informing them of the benefits available.  HR will obtain all relevant documentation, death certificate, contact details, dependants etc.

All pertinent information will be presented to a sub-committee of the board of trustees who will determine how the proceeds should be distributed.  The trustees will submit a sign resolution to the fund administrator to disburse the benefits i.e. Grouplife life as well as provident benefits. 


10.  A disability benefit application

Click the follow link to a process map to explain the disability application process as well as the process when applying to retire due to ill health (medical boarding)




Implications of applying for disability benefits:

1)       When application for disability benefits is made the staff member must stop working – the staff member uses his/her sick leave during this period.  If sick leave is depleted the staff member uses annual leave, after which he/she may apply to have accumulative leave converted to sick leave.   Should the disability application be approved the member will be informed thereof.  A waiting period of three months apply before any payment is made, both in terms of a lump sum payment or the monthly income replacement benefit.  The disability benefit will be paid till the earliest of:

  • Recovery
  • Death
  • Reaching normal retirement age

2)       The member will be assessed continuously to ensure he/she is still disabled.

3)       Should the member be permanently disabled and the prognosis is such that chances of recovery is slim, the member may be moved to an alternative post on the university establishment.  The member will still be deemed to be employed, but his/her post can now be filled on a permanent basis.

 

11.  Can I transfer amounts in from other funds?

You may transfer into the Fund any cash amount to which you may become entitled by your prior participation in some other Fund, in order to acquire additional benefits.

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