Agenda Demo

ALEXANDER FORBES CORE PLAN

(PROVIDENT SECTION)
PARTICIPATING EMPLOYER:

AGENDA FOR THE MEETING OF THE COMMITTEE TO BE HELD AT 14H00 ON
11 OCTOBER 2016, AT THE OFFICES OF

Page
MANAGEMENT OF THE FUND

1. OPENING, PRESENT AND APOLOGIES

1.1 Confirmation of committee members 1
1.2 Quorum 2
1.3 Election of chairman 2
1.4 Hot topics seminar 2

2. MINUTES OF THE MANAGEMENT COMMITTEE MEETING HELD ON 3
29 SEPTEMBER 2015

3. MATTERS ARISING FROM THE PREVIOUS MEETING HELD ON
29 SEPTEMBER 2015

3.1 (7.1) Member booklet and schedule update 4

4. FOCUS FOR MEETING

4.1 Strategic overview 5
4.2 Update on retirement reform 6
4.3 In-fund solutions 7

5. YEAR PLAN 8

INVESTMENTS

6. INVESTMENTS

6.1 Value of assets 9
6.2 Investment returns – gross returns annualised 9
6.3 Reduction in the investment fees 10
6.4 Introducing the Goals-Based Lifestage Model 11

OPERATIONAL ISSUES

7. ADMINISTRATION

7.1 Administration Report 12
7.2 Authorised signatories 12
7.3 Bank account 12

8. INSURANCE

8.1 Confirmation of Insurance Arrangements 13
8.2 Medical underwriting 13

9. ADDITIONAL ITEMS 15
10. DISCLOSURES 16

MANAGEMENT OF THE FUND

1. OPENING, PRESENT AND APOLOGIES

1.1 Confirmation of committee members

The committee members are to be confirmed as:

NAME EMPLOYER APPOINTED / APPOINTMENT DATE
MEMBER ELECTED
Employer Appointed 1 October 2009
Employer Appointed 1 December 2009
Member Elected
Member Elected 1 March 2012
1 March 2012

All matters discussed in the meeting are confidential and may not be disclosed (in writing or verbally)
to anyone other than another committee member, or a fund appointed service provider, if it is agreed
by the committee that the service provider should be privy to the discussion in question.

Committee members need to declare if they have any financial or other interest in any property,
business or any other undertaking of whatsoever nature, directly or indirectly in terms of which they
could be improperly benefited or advantaged by a decision made by the committee.

Action: The committee to note.

1

AF Coreplan (Provide

COMMMITTEE IN OF

Trustee Designation Date of Conta
Names
Employer Representative Appointment
Consultant Employer Representative
Naahid Bell Member Representative Tel No. Fax No
Member Representative
1 October 2009 (041) 463-3338 (041) 463-

1 December 2009 (041) 463-3338 (041) 463-

(041) 463-3338 (041) 463-

1 March 2012 (041) 463-3338 (041) 463-

ent Section): Physical Address Postal Address
FFICE 2016

act Details

o. E-mail
-2602
-2602
-2602
-2602

1.2 Quorum

The fund rules provide that a quorum is a minimum of half plus one of the committee, and that there
is an equal number of employer appointed and member elected representatives present. If there is
unequal representation, then one or more of the representatives in the majority will need to abstain
from voting to have equal voting representation.

2 representatives are required for a quorum to be present.

Action: The chairman is to confirm the meeting is quorate.

1.3 Election of a chairman

The fund rules require that the committee elects a person to act as chairman. The committee can,
but is not required to elect a new chairman from time to time. If the chairman is absent, the committee
must elect a new chairman for the meeting.

Action: The committee is to confirm the chairman for the meeting.

1.4 Hot topics seminar

Alexander Forbes holds Hot Topics seminars that deal with topical retirement fund issues. The dates
of the Hot Topics seminars for 2016 is as follows:

Hot Topics Seminar | Legal & regulatory

Region Date Venue

Pretoria 18 October 2016 Centurion Lake Hotel
Johannesburg 19 October 2016 Summer Place
Port Elizabeth 24 October 2016 Boardwalk Hotel
Cape Town 25 October 2016 Century City Conference
Centre
Durban 26 October 2016 Gateway Hotel

Action: The committee to note.

2

2 MINUTES OF THE MANAGEMENT COMMITTEE MEETING HELD ON .
The committee may is to confirm and the chairman is to sign the minutes of the meeting held on
Action: The committee to confirm.

3

ALEXANDER FORBES CORE PLAN

(PROVIDENT SECTION)
PARTICIPATING EMPLOYER:

MINUTES FOR THE MEETING OF THE MANAGEMENT COMMITTEE HELD AT
14H00 ON 6 OCTOBER 2015,

Present: Employer Representative
By invitation: Employer Representative
Member Elected
Member Elected

Alexander Forbes Financial Services
Alexander Forbes Financial Services

MANAGEMENT OF THE FUND

1. OPENING, PRESENT AND APOLOGIES
1.1 Confirmation of management committee members

The committee members were confirmed as:

NAME EMPLOYER APPOINTED / APPOINTMENT DATE
MEMBER ELECTED
Employer Appointed 1 October 2009
Employer Appointed 1 December 2011
Member Elected
Member Elected 1 March 2012
1 March 2012

The committee noted that all matters discussed in the meeting were confidential and may
not be disclosed (in writing or verbally) to anyone other than another committee member,
or a fund appointed service provider, if it is agreed by the committee that the service
provider should be privy to the discussion in question.

The committee members noted that they needed to declare if they had any financial or
other interest in any property, business or any other undertaking of whatsoever nature,
directly or indirectly in terms of which they could be improperly benefited or advantaged
by a decision made by the committee. The committee declared that there were no
potential conflicts of interest.

1.2 Quorum

The committee noted that as 2 management committee representative was present, a
quorum was present.

_________

Initial

3 MATTERS ARISING FROM THE PREVIOUS MEETING HELD ON

3.1 (8.1) Administration reporting

advised that she was unable to submit the claim electronically for .
Alexander Forbes undertook to investigate and advise.

Alexander Forbes can confirm that the claim was received and finalised on 25 July 2016.

Action: Committee to note.

4

4. FOCUS FOR MEETING
4.1 Strategic Overview
The Trustees are referred to the attached strategic overview which sets out the discussion points for
the meeting as well as key Fund information.
Action: Trustees to note/discuss.

5

The Alexander Forbes CorepUlpad

Management Meeting to be held on 11 October 2016, at

Description Risk Benefits Administration
Cover • Unitisation
Approved • Cash Flow
Group Life 2 x annual pensionable salary • Administration Report
Assurance • Disposal of death benefits
• Disability claim management
Permanent & 2 x annual pensionable salary • Section 14 transfers
Total Disability Financial
• Enhanced Financial Assessment
Notes: • Fee Review
Legal
GLA Free Cover Limit – R450 000 • Adjudicator complaints
• Rule Amendments
Risk Benefits
• Risk re-broke

• Fidelity cover

Risk Benefits • Communication policy Operational
• Membership certificate
Description Cover • Member booklet Long Term
Funeral cover • Member investment booklet Secu
Member / Spouse R18 000 • Quarterly newsletter
• Angle + NRR of 6
Children 14 – 21 R18 000 • Trustees report
• Benefit statements Communication
Children 6 – 13 R 9 000 • AFOnline
• IPFM (Projection & DNA
Children 1 – 5 R 4 500
statements)
Children 0 – 11 months R 2 250 • Brochures - planning for

Stillborn R 2 250 retirement, leaving the fund
and annuity options at

Description Employee: Employee:
Employer contribution 5.00% 7.50%

Employer: Employer:
7.50% 7.50%

7.50% 7.50%

Employee contribution 5.00% 7.50% Investment Return
Portfolio
Less: 3.07% 3.07% AF Balanced High Growth
1.36% 1.36% AF Balanced High / Medium Growth
Group Life, Permanent & Total AF Balanced Medium Growth
Disability AF Balanced Medium Conservative Growth
AF Balanced Conservative Growth
Administration fee including VAT

Retirement allocation 8.07% 10.57%

* Funeral premium R32.40 per member per month

andfsy Fund (Provident Section):

• Objectives Focus for Meeting
• Member Watch Analysis
• Governance strategy Matter Agenda Item
• FAIS
• Benefit design Update on retirement reform 4.2
• Rules In-fund solutions 4.3
• Employer mandate

• Election of member and
employer representatives &
chairperson
• sub-committees
• Trustee training and
Hot Topics

Management • Investment strategy Factors impacting Long Term Financial Security of
of Fund • Default Strategy Members
(including • Portfolio selection
benefit design) • LifeStage Model & Lifestage Costs – Risk Benefits & Expenses
The Trustees should aim to review the costs to ensure its
Financial Annuity reasonability relative to the value provided by a particular
urity • Benchmarks item. This ensures that the net contribution allocated to
60% - 75% • Investment monitoring & retirement savings and any additional value is as high as
possible.
Investments reporting
Salary Progression
Members should be informed of the impact that salary
progression could have on their retirement planning.

Investment Returns
Investment returns are the biggest contributor to
members’ retirement savings. Trustees should always
ensure that the most appropriate investment strategy is
implemented.

Losses due to non preservation
The impact that non preservation is detrimental to
retirement savings. Steps can be put in palce to improve
the overall preservation rates..

Annuity factors at retirement & retirement age
Investment strategies should take this into account to
ensure that the strategies before and after retirement are
aligned. This issue can be addressed in pre-retirement
seminars with members approaching retirement age.

ns ending 31 August 2016

6 months 3 year 5 years Ongoing Investment/Disinvestment Strategy

8.07% 12.95% Inception date: April 2012 Manager Portfolio %
Investment Solutions Default
7.58% 12.04% AF Balanced
Investment Solutions LifeStage and
7.09% 11.13% Investment Solutions Model MIC
Investment Solutions MIC
6.57% 10.20% Stable Focus
MIC
5.22% 8.67% Real Return
Focus MIC

Performer

4.2 Update on retirement reform

Some of the tax changes to retirement funds which were originally scheduled for 1 March 2015
became effective on 1 March 2016. The changes move towards creating a uniform retirement fund
system for all types of retirement funds.

4.2.1 Changes going ahead in 2016

Contributions

Before 1 March 2016 provident fund members received no tax deductions for their
contributions, but pension fund members got a tax deduction of up to 7.5% of retirement
funding income (similar to pensionable salary). Members contributing to retirement annuity
funds got a tax deduction of 15% of non-retirement funding income. Employer contributions
weren’t included in employees’ taxable income as a fringe benefit.

From 1 March 2016, contributions to pension funds, provident funds and retirement annuity
funds are treated in the same way for tax. Employer contributions are included in the taxable
income of employees as a fringe benefit, but are offset by a tax deduction each year.
Employees’ tax deductibility of contributions are limited to 27.5% of the greater of remuneration
or taxable income, up to a yearly limit of R350 000. This is an overall tax deductible limit to all
retirement funds contributed to (pension, provident and retirement annuity funds). Both the
employee and employer contributions form part of this tax deductible limit. Members can roll
over any contributions over 27.5% or R350 000 into future tax years. They can claim these on
assessment, subject to yearly tax-deductible limits.

This is a benefit for most members, especially provident fund members, as they can deduct
more for tax purposes. Members should consider paying additional contributions to take
advantage of this improvement to boost retirement savings tax efficiently.

An example

A provident fund member contributes 5% and his employer contributes 10%. Under the current
tax legislation, the member will not get the 5% as a tax deduction and the 10% is not included
in his taxable income. Essentially, the member doesn’t get a tax break on the 5%.

With the new tax change, the member will get the full 15% as a tax deduction, subject to the
R350 000 limit. This means that the member’s taxable income will be less and his take-home
salary will be more, assuming the member doesn’t exceed R350 000 in contributions.

Before 1 March 2016, contributions are based on pensionable salary, which is typically less
than total remuneration. Therefore, even greater tax savings can be achieved because the
27.5% will be based on the greater of taxable income or remuneration.

The R350 000 limit has an impact on high earners. Members who have a pensionable salary
of more than R1.27 million and contribute 27.5% will be limited by R350 000 for tax-deductibility
purposes. Therefore any contribution over R350 000 will no longer be tax deductible, but this
doesn’t mean these members shouldn’t continue to contribute more than R350 000, because
there are other benefits to saving in a retirement fund.

6

4.3 In-fund solutions

The trustees of the Alexander Forbes Core Plan have created solutions to allow members to keep
their money invested when they leave your employment.

Now members have extra ways to protect their savings and keep them for what they are originally
intended – a retirement income.

In-fund solutions are cost-effective options for members who, when they stop working for you, want
to preserve their retirement savings.

IN-FUND PRESERVATION IN-FUND LIVING ANNUITY

Members keep their savings in the fund after Members who stay with you until retirement
leaving your employment and stay invested in have more choice, as they can now get a
the same investment strategy they had while pension from the fund through the in-fund

working for you. living annuity.

Appended is a brochure with more information available on the in-fund solutions.

Action: Alexander Forbes to lead the discussion.

7

UMBRELLA FUND IN-FUND SOLUTIONS

UMBRELLA FUND

IN-FUND

SOLUTIONS

Need to know more about leaving your money in the fund?

Keeping your savings invested in the fund
when leaving your employer

Alexander Forbes research has shown that only about 9% of retirement fund members in South Africa retire with enough money.
This is mainly because members don’t preserve their retirement fund benefits when they change jobs. The trustees would like to help
members preserve their money when they leave their employer by letting them choose to keep their money invested in the fund.

WHAT YOU NEED TO KNOW Investment options

There’s no minimum amount of money you need to ■■ Your money will stay invested in the portfolio and strategy
have in the fund to access this option. that you were invested in while working. If this portfolio or
strategy is no longer offered at some stage in the future,
If you’ve left the fund in the past, you won’t be able the fund will communicate the revised portfolio option
to bring your money back to the fund. and strategy to you, which you may follow. Alternatively,
you will be able to choose from the fund’s other available
You need to inform the fund if you want to use this options and strategies.
option by completing the withdrawal claim form,
which is available on the fund’s website. ■■ The portfolios and investment options available to you will
be the same as those available to members who are still
If you choose this option, you must provide the working for the employer and contributing to the fund.
administrators with your contact details and keep
these up to date so that the fund can stay in ■■ The growth of your retirement savings will be in line with
contact with you. the portfolios in which you’re invested.

■■ Once you’ve left your employment you can switch
portfolios at any stage without being charged for the
switch, although the new portfolio you choose may have
a different ongoing investment fee.

UMBRELLA FUNDS

IN-FUND PRESERVATION

Insurance benefits NOTE: ■■ If you had a housing loan secured
against your money in the fund while
■■ You won’t have any risk benefits such ■■ You and the financial adviser employed, you will be able to settle the
as disability cover through the fund. need to agree on any advice loan from your money in the fund and
Some risk benefits may continue to fees. These fees will be for your keep the rest of the money invested in
provide cover for one month after your account. the fund. This applies if you cannot or
employment ends, to allow you time to do not want to settle it by other means.
arrange new cover. ■■ On your instructions the fund
will pay the agreed advice fee to ■■ The employer can claim money from
■■ We encourage you to get advice from the financial adviser. your retirement benefit if there has
an accredited Alexander Forbes been any wrongdoing such as theft,
financial adviser to consider your risk ■■ The financial adviser will need fraud or misconduct. If there is a
benefit needs. to be accredited with the fund. claim, you will be able to keep the
money in the fund once the employer
Getting advice ■■ The advice fee cannot be more has been paid.
than the maximum allowed by
All retirement planning decisions you the fund. ■■ If you pass away after choosing
make are important to your long-term this option, the trustees will have
financial security. Speak to an accredited ■■ You will need to assess the to decide how to divide your death
Alexander Forbes financial adviser ongoing service and value benefit between your dependants
before making any decisions about your provided by your adviser. and nominees. It is very important
retirement fund withdrawal benefit. for you to complete a nomination of
■■ We encourage you to get advice on beneficiaries form when you choose
Getting in touch your options from an accredited this option, as the fund will not
Alexander Forbes financial adviser if retain any previously completed form.
■■ Your human resources department you are retrenched.
can refer you directly to an accredited Costs
Alexander Forbes financial adviser, Once you have chosen
who’ll be able to answer any questions There are no upfront administration,
you have about your retirement this option investment or advice fees charged by the
saving options. fund. The only advice fee paid will be as
■■ The fund will send newsletters, the agreed between you and your accredited
■■ You can call 0860 66 44 44 or email annual trustees’ report and a yearly Alexander Forbes financial adviser.
[email protected] for benefit statement to you.
information on the in-fund solution. The ongoing fee for administration is
■■ If you keep your money invested in 0.2% of the money in the fund each
■■ AF Online is a practical website where the fund, you can’t keep contributing year. There is a minimum administration
you can find real-time information to the fund. You can transfer money fee of R20 per member per month
about your savings and keep up in from another employer’s fund or a and maximum of R 333 per member
to date with your investments and preservation fund at a later stage. per month.
benefits. It’s user-friendly, with easy
access to the financial tools and ■■ You can choose to have your money The investment fee is a percentage of
information you need to help you paid to you later, but you’ll need to your money in the fund on the same
secure your financial well-being. withdraw all your money from the scale as the fund’s fee scale for a
Register for access at fund at that later date. You can also particular portfolio, for all assets in that
www.afonline.co.za. choose to have part of the money paid portfolio in the preserved member pool.
out at that later stage, and transfer the
If you are retrenched balance (or the full benefit) to another For any other queries,
fund or preservation fund – if you do contact the Alexander
■■ If you’re retrenched and take your this, however, you cannot join the Forbes Individual
benefit in cash, you might be able to fund again in your individual capacity. Advice Centre:
pay less tax than if you had resigned Before making a decision, we
or were dismissed. encourage you to take advice from an Share call number:
accredited Alexander Forbes financial 0860 100 983
■■ If you keep your savings invested in adviser on your options. Email address:
the fund and want to take these out [email protected]
later, the tax will not be the tax on Postal address:
retrenchment but rather the tax on PO Box 785451, Sandton, 2146
resignation or dismissal.

■■ If you keep the money invested in the
fund until you retire, you will enjoy the
lower tax rate.

Alexander Forbes Life is a licensed financial services provider (FSP 1178). The information in this document belongs to Alexander Forbes. You may not copy, distribute or
modify any part of this document without the express written permission of Alexander Forbes.

Produced by Alexander Forbes Communications. Photos: Gallo Images 11694-AFRF-F-Preservation-2016-08

IN-FUND LIVING ANNUITY

UMBRELLA FUND

IN-FUND

SOLUTIONS

Need to know more about the in-fund living annuity

Getting a pension from the fund when
you retire

WHAT YOU NEED TO KNOW What is a living annuity?

The fund rules now allow you to get a pension A living annuity is an investment where the retirement money
that is paid from the fund. This pension is a living is invested after retirement to provide an income. Each year,
annuity and not a guaranteed pension. you choose the amount of income you want to receive (within
the regulated limits of between 2.5% and 17.5% of the
The fund pension is a flexible pension, where you remaining money), usually paid as a monthly income.
can decide how much money to draw each year
as income, but it is important to be aware that You decide how the money is invested in a living annuity,
you could run out of money if you draw too much unlike a guaranteed pension. During your lifetime you have
too soon. no access to the money paid to the insurer. You only have the
right to be paid a pension, but any money that remains after
The law allows you to draw between 2.5% and death passes to your nominated beneficiaries.
17.5% of your money each year.
A crucial difference between a
This type of pension allows you to leave your GUARANTEED PENSION and a LIVING
money to your beneficiaries, for example family ANNUITY is that in exchange for this
members, if you pass away while you still have flexibility, you take the risk that if the
money left. investment returns are poor and / or you
draw a pension which is too high, you can
This option is only suitable if you have enough outlive your savings. With a guaranteed
money to invest. pension, the insurer must pay a pension
for life and if you die early the capital
does not pass to beneficiaries.

UMBRELLA FUNDS

ALEXANDER FORBES

NOTE: The most important benefit of getting a Who can choose this option?
pension from the fund is the low investment ■■ If you are retiring from the employer
fees in a retirement fund compared to the ■■ If you decided to keep your money invested in the fund when
individual market. Because of the economies
of scale in a retirement fund, investment fees you left your employer
are generally far lower than in the individual ■■ If you decided to keep your money in the fund when you left
market. Lower investment charges mean that
the cost savings can give a higher income or your employer but deferred your retirement
improve the investment return. ■■ Non-member spouses are entitled to a portion of your benefit

What’s the difference between buying as a result of a divorce order if you chose to defer your
a living annuity from an insurer outside money in the fund.
the fund and getting a living annuity ■■ Spouses or beneficiaries if you pass away.
from the fund?
Minimum amount
1 A living annuity outside the fund is You need to have at least R600 000 of your money in the fund
bought from an insurer in your name and to use for your pension, after you have taken any money in
the trustees of the fund no longer have cash, and any claims by your employer for fraud or wrongdoing
oversight or duties. and tax have been paid.

2 An in-fund living annuity is the same as a Risks in a living annuity
living annuity, except that the retirement
money stays invested in the portfolios ■■ Investment risk
offered by the fund and you stay a member
of the fund. You also benefit from lower ■■ Inflation risk
investment fees because of the economies ■■ Living longer than expected
of scale in retirement fund.
Because of these risks, if you choose to get a living
3 With an in-fund living annuity, the annuity from the fund you may face the risk of a
trustees still have protection and reduced income in the future. You may also run the
oversight responsibilities in terms of risk of depleting your assets and receiving no further
the Pension Funds Act and the rules income. Retirement decisions are complex. Choosing
of the fund. a pension is a serious and important life decision and
you are encouraged to seek the advice of an accredited
4 The in-fund living annuity must Alexander Forbes financial adviser.
comply with the prescribed investment
guidelines in Regulation 28 of the The first monthly pension payment
Pension Funds Act, which is not You can expect to receive your first monthly pension payment at
required when buying a living annuity the end of the month after your first month of retirement. This
from an insurer. means that if you retire on 31 December, you can receive your
first payment on 25 February. It’s important to plan for this.

IN-FUND LIVING ANNUITY

Investment options Once you choose this option

The main portfolios that you can use to invest ■■ Inform the fund that you want to choose this option by
your money are set out below. filling in the retirement claim form on the fund’s website.
Also complete the application form to tell the fund how
INCOME TARGETING PORTFOLIO you’d like your pension to be invested and how the income
should be paid.
■■ AF Protector
■■ AF Passive Protector ■■ Provide the administrators with your contact details and
keep these up to date so that the fund can stay in contact
GROWTH PORTFOLIOS (OFFER GREATER with you.
GROWTH OPPORTUNITIES BUT WITH HIGHER
RISKS OF LOSSES) ■■ The fund will provide information on the terms and
conditions in a fund policy document and the pensioner card
■■ AF High Growth (this is actively invested using when you choose this option. You will receive a payslip when
specialist portfolios) a payment is made.

■■ AF Balanced High Growth (this is actively invested ■■ Every year you’ll receive a benefit statement, trustee report
using balanced portfolios) and a letter asking you to review your income.

■■ AF Passive Bold (this is passively invested) ■■ You can add money from another fund before retirement, but
■■ AF Life Performer not after retirement.
■■ AF Life Spectrum
■■ You cannot withdraw a lump sum from your money in the
The investment options available to members who are still fund during your lifetime, unless the total amount of money
employed will also be given to you if you have kept your money in the fund is less than the amounts set by the minister of
invested in the fund. finance in the government gazette from time to time.

You can switch portfolios at any stage. You won’t be charged for ■■ The fund is not allowed, by law, to pay a pension to any
the switch, although the new portfolio you choose may have a person other than the member. You can’t transfer your rights
different ongoing investment fee. If you switch into a portfolio to anyone else, and creditors can’t attach your living annuity
that is not listed above, you’ll need to get advice from an for any judgment debts.
accredited Alexander Forbes financial adviser.
■■ You can transfer your money from the fund’s
Getting advice in-fund living annuity into a guaranteed annuity or a living
annuity outside the fund in line with current legislation,
All retirement planning decisions you make are important regulations and fund rules.
to your long-term financial security. Speak to an accredited
Alexander Forbes financial adviser before making any decisions
about choosing a pension.

If you take an income more than the income limit percentage
set by the fund’s trustees or if you want to invest in certain
portfolios provided by the fund, it is strongly recommended that
you take advice.

Tax

The fund does not provide individual tax or financial planning
advice. You will need to take advice from an accredited
Alexander Forbes financial adviser on the tax
that applies.

ALEXANDER FORBES

Ensure that you have completed the
dependants and nominees form.

It is very important that you complete
this information, as the fund won’t
keep any previously completed form.

If you pass away THE FEE FOR EACH OF THE CORE PORTFOLIOS IS AS
FOLLOWS:
If you pass away while you’re getting a pension from the fund,
the full value of the money in the fund will be paid to your AF PROTECTOR (actively managed)
nominated beneficiaries, as set out in the rules of the fund. 0.89% of the money in the fund each year plus
Beneficiaries can choose one of the following options: performance fees, if applicable
■■ Continue to get a living annuity income from the fund.
■■ Buy a pension from an insurer in any way allowed under AF PROTECTOR (passively managed)
0.60% of the money in the fund each year plus
legislation at the time. performance fees, if applicable
■■ Choose to take all or part of the money in the fund as a lump
AF HIGH GROWTH
sum, as allowed under legislation and the fund rules at 0.99% of the money in the fund each year plus
that time. performance fees, if applicable

If no nomination is made, the benefit will be paid to the estate. AF BALANCED HIGH GROWTH (PERFORMER)
0.80% of the money in the fund each year plus
Costs offshore cost plus performance fees, if applicable

There are no upfront administration, investment or advice fees AF PASSIVE BOLD
charged by the fund other than advice fees agreed between 0.60% of the money in the fund each year
you and your accredited Alexander Forbes financial adviser.

The fee for administration and investment is combined and
does not include the fee for advice. The fee will depend on the
investment portfolio chosen.

For any other queries, contact Share call number: 0860 100 983
the Alexander Forbes Individual Email address: [email protected]
Advice Centre: Postal address: PO Box 785451, Sandton, 2146

The information in this document belongs to Alexander Forbes. You may not copy, distribute or modify any part of this document without the express written permission of
Alexander Forbes. Written and designed by Alexander Forbes Financial Services Communications. Alexander Forbes Life is a licensed financial services provider (FSP 1178).

Produced by Alexander Forbes Communications. Photos: Gallo Images 11694-AFRF-F-Living-Annuity-2016-08

5. YEAR PLAN As at Available
30 June
Reporting to committee 30 June 31 August
Administration report 31 August
Reporting to members
Benefit statements 1 October
Regular fund dates 1 October
Annual fee review
Renewal of risk benefit arrangements by insurer

8

INVESTMENTS

6. INVESTMENTS

6.1 Value of assets

Alexander Forbes Life reinsures the assets with Investment Solutions. The value of the invested
assets as at 31 August 2016 was as follows:

PORTFOLIO Current Value Previous Value
as at as at
AF Life Performer Focus
AF Balanced High Growth 31/08/2016 31/08/2015
AF Balanced High / Medium Growth - R 2 005
AF Balanced Medium Growth R 2 983 268
AF Balanced Medium / Conservative Growth R 3 557 259
AF Balanced Conservative Growth R 36 150 -
Total R 80 043
- R 79 662
R 48 418 R 216 168
R 96 096
R 3 361 146
R 3 737 923

6.2 Investment Returns – Gross Returns annualised
Appended is the gross annualised investment returns for the period ended 31 August 2016.
Action: Committee to note.

9

Alexander Forbes Retirement Fund

August 2016

AF SPECIALIST LIFESTAGE 1 Month 3 Months 6 Months YTD
1.56% -0.18%
AF High Growth 0.93% -0.18% 7.59% 6.56%
Benchmark 1.23% 0.44% 8.30% 7.39%
AF High/ Medium Growth 0.68% 0.32% 7.43% 7.03%
Benchmark 0.79% 0.89% 7.58% 7.18%
AF Medium Growth 0.37% 0.84% 7.39% 7.39%
Benchmark 0.49% 1.02% 7.27% 7.41%
AF Medium/Conservative Growth 0.15% 1.12% 6.78% 6.91%
Benchmark 0.28% 1.44% 6.50% 6.95%
AF Conservative Growth -0.13% 1.40% 6.59% 7.11%
Benchmark 6.04% 6.75%
1 Month 3 Months
AF BALANCED LIFESTAGE 2.04% -0.03% 6 Months YTD
1.53% 0.08% 7.44%
AF Balanced High Growth 1.59% 0.09% 8.07% 5.65%
Benchmark 1.43% 0.53% 7.10% 7.19%
AF Balanced High/Medium Growth 1.10% 0.22% 7.58% 6.05%
Benchmark 1.33% 0.97% 6.89% 6.95%
AF Balanced Medium Growth 0.64% 0.34% 7.09% 6.45%
Benchmark 1.24% 1.40% 6.68% 6.67%
AF Balanced Medium/Conservative Growth 0.08% 0.39% 6.57% 6.84%
Benchmark 1.31% 1.99% 6.46% 5.89%
AF Balanced Conservative Growth 5.22% 7.31%
Benchmark 1 Month 3 Months 5.74%
0.96% -0.50% YTD
AF PASSIVE LIFESTAGE 1.16% -0.32% 6 Months 6.95%
0.72% 0.12% 7.14%
AF Passive Bold 0.89% 0.23% 7.98% 6.81%
Benchmark 0.54% 0.79% 8.18% 6.95%
AF Passive Bold/ Moderate 0.57% 0.74% 7.26% 7.22%
Benchmark 0.31% 1.23% 7.45% 7.10%
AF Passive Moderate 0.37% 1.17% 7.22% 6.95%
Benchmark 0.20% 1.74% 7.19% 6.79%
AF Passive Moderate/ Cautious 0.13% 1.61% 6.55% 7.11%
Benchmark 6.43% 6.70%
AF Passive Cautious 1 Month 3 Months 6.33%
Benchmark 1.68% 0.67% 5.98% YTD
0.86% -1.07%
MULTIMANAGER RANGE 0.73% 2.22% 6 Months 5.87%
0.60% 1.67% 4.36%
AF Life Accelerator 0.97% 0.12% 8.42% 6.13%
Benchmark 0.81% 0.77% 7.90% 7.05%
AF Life Banker 0.68% 1.92% 4.56% 4.54%
Benchmark 0.82% 1.57% 3.34% 5.67%
AF Life Conserver 2.04% -0.03% 5.12% 7.46%
Benchmark 1.53% 0.08% 6.32% 5.65%
AF Life FullVest 1.02% 0.16% 3.62% 6.19%
Benchmark 1.12% 2.51% 4.59% 8.25%
AF Life Performer -0.31% 0.60% 8.07% 6.10%
Benchmark 1.04% 2.28% 7.10% 7.60%
AF Life Real Return Focus 0.49% 0.19% 5.95% 5.67%
Benchmark 1.04% 2.28% 6.48% 7.60%
AF Life Stable Focus 1.46% -0.16% 5.49% 6.33%
Benchmark 1.47% -0.25% 6.01% 5.81%
AF Life Stable Focus Combined 1.70% -0.15% 4.95% 7.95%
Benchmark 1.53% 0.08% 6.01% 5.65%
AF Life Spectrum 0.89% -0.88% 6.67% 3.22%
Benchmark 0.22% -0.32% 6.72% 8.98%
AF Life Value Alpha 7.03%
Benchmark 1 Month 3 Months 7.10% YTD
AF Life 27Four Shari'ah Multi-Managed Balanced 3.14%
Benchmark 2.58% 0.32% 5.56% 10.30%
1.53% 0.08% 5.65%
SINGLE MANAGER RANGE 1.24% -1.19% 6 Months 9.38%
1.53% 0.08% 5.65%
AF Life Allan Gray 2.62% 0.22% 8.16% 7.66%
Benchmark 1.61% 0.20% 7.10% 5.71%
AF Life Allan Gray Ltd Classic Balanced 3.01% 1.34% 6.66% 10.59%
Benchmark 0.65% 0.54% 7.10% 7.71%
AF Life Coronation Fund Managers 1.79% -0.91% 11.29% 5.50%
Benchmark 1.53% 0.08% 7.36% 5.65%
AF Life Coronation Managed I 1.44% 0.11% 12.42% 3.90%
Benchmark 1.53% 0.08% 8.71% 5.65%
AF Life Foord Asset Management 1.72% -0.44% 5.84% 5.28%
Benchmark 1.17% 0.64% 7.10% 6.74%
AF Life Investec Asset Management 0.65% -0.23% 5.08% 6.91%
Benchmark 1.53% 0.08% 7.10% 5.65%
AF Life Investec Cautious Managed 0.07% -1.95% 4.39% 6.66%
Benchmark 1.04% 2.28% 6.49% 7.60%
AF Life Oasis Asset Management 1.43% 0.09% 6.56% 7.13%
Benchmark 1.53% 0.08% 7.10% 5.65%
AF Life Oasis Crescent Balanced High 4.29%
Benchmark 1 Month 3 Months 6.01%
AF Life Prudential Asset Management 7.82%
Benchmark 0.80% 1.60% 7.10%

INFLATION (JULY 2016) 6 Months YTD
4.60% 5.40%
CPI headline inflation

d - investment returns

1 Year 3 Years 5 Years 8 Years 10 Years 15 Years Inception Inception date
15.27% 12.35% 12.58%
10.91% 12.72% 16.56% 13.09% 13.07% 15 Years 12.84% 28 February 2006
11.72% 14.32% 13.66% 11.48% 11.84% 13.54% 28 February 2006
10.34% 11.61% 14.50% 11.92% 12.07% 15 Years 12.08% 28 February 2006
10.47% 12.61% 12.66% 11.14% 11.38% 12.50% 28 February 2006
9.84% 11.13% 13.05% 11.32% 11.43% 15 Years 11.58% 28 February 2006
9.65% 11.64% 11.27% 10.52% 10.90% 8.81% 11.75%
9.38% 10.38% 11.13% 10.24% 10.54% 7.54% 11.00% Inception date
8.51% 10.24% 10.24% 10.09% 10.47% 12.49% 10.75%
8.77% 9.75% 9.59% 9.37% 9.71% 11.58% 10.44% 16 April 2012
7.40% 9.06% 10.96% 9.76% 16 April 2012
5 Years 8 Years 10 Years 5.88% 16 April 2012
1 Year 3 Years 16.02% Inception 16 April 2012
11.47% 12.95% 5 Years 8 Years 10 Years 15.05% 16 April 2012
9.43% 11.79% 15.66%
10.52% 12.04% 5 Years 8 Years 10 Years 14.90% 14.02% Inception date
9.44% 11.36% 14.76% 14.25%
9.57% 11.13% 7.06% 7.79% 8.37% 16.37% 13.15% 01 January 2013
9.44% 10.93% 5.37% 6.11% 6.79% 15.05% 12.83% 01 January 2013
8.57% 10.20% 10.86% 10.52% 10.83% 12.27% 01 January 2013
9.41% 10.48% 12.03% 10.51% 10.61% 15 Years 11.42% 01 January 2013
7.21% 8.67% 12.08% 9.38% 10.82% 11.37% 01 January 2013
9.77% 9.83% 5.72% 5.31% 6.26% 17.63% 9.07%
16.38% 13.75% 13.87% 15.05% 10.00% Inception Date
1 Year 3 Years 15.05% 12.70% 13.04% 16.67%
11.81% 14.46% 11.37% 10.37% 10.61% 15.11% Inception 27 January 2016
11.57% 14.49% 10.58% 10.48% 11.59% 31 March 1998
10.68% 12.90% 8.74% 9.33% 9.94% 16.29% 14.84% 31 March 1998
10.28% 12.82% 9.58% 9.22% 10.19% 15.05% 14.97% 31 March 1998
10.06% 12.11% 12.93% 31 March 1998
9.41% 11.80% 14.56% 12.19% 12.53% 12.95% 31 October 2002
9.31% 10.96% 14.35% 12.13% 12.55% 11.80% 31 August 2006
8.48% 10.39% 16.39% 13.64% 13.64% 11.60% 01 September 2014
8.68% 10.08% 15.05% 12.70% 13.04% 10.38% 31 March 1998
7.58% 9.22% 9.90% 31 August 2001
5 Years 8 Years 10 Years 9.28% 28 November 2014
1 Year 3 Years 8.49%
16.44% 14.21% 14.34% Inception Date
8.50% 7.45% 15.05% 12.70% 13.04% Inception 31 March 1998
6.36% 5.63% 15.93% 13.79% 14.02% 31 August 2006
9.11% 8.95% 15.05% 12.70% 13.04% 9.03% 31 October 2000
9.45% 10.56% 16.69% 14.28% 14.60% 8.25% 30 June 2009
7.10% 12.63% 15.22% 12.80% 13.12% 9.76% 30 April 2002
6.03% 5.78% 16.80% 8.44% 31 March 1998
11.49% 12.96% 15.40% 13.79% 13.93% 12.42% 30 November 2010
9.43% 11.79% 16.97% 12.70% 13.04% 11.34% 31 March 2005
8.95% 10.32% 15.05% 13.60% 14.86% 10.83% 01 August 2011
10.29% 10.54% 16.52% 12.70% 13.04% 5.86% 31 December 2004
6.54% 8.31% 15.05% 14.93%
9.29% 9.54% 9.95% 12.56% 13.10% 14.12%
7.85% 13.03% 12.70% 13.04% 11.99%
9.29% 10.95% 15.48% 10.96%
8.82% 10.62% 15.05% 13.63% 13.74% 9.94%
8.52% 12.49% 12.70% 12.70% 13.04% 10.19%
11.88% 11.79% 8.72% 8.42%
9.43% 16.05% 8 Years 10 Years 9.60%
9.32% 3 Years 15.05% 14.39%
9.46% 5.50% 6.40% 14.10%
14.06% 5 Years 16.37%
1 Year 11.79% 15.05%
13.12% 5.70% 9.72%
16.28% 11.79% 8.21%
9.43% 12.59%
17.57% 11.91% Inception
9.43% 12.29% 20.28%
11.21% 13.01% 14.12%
9.82% 11.68% 14.02%
12.89% 11.79% 13.04%
10.25% 14.66% 16.64%
9.27% 11.79% 15.11%
9.43% 10.27% 17.66%
8.61% 11.23% 15.67%
9.43% 11.25% 16.26%
10.46% 11.79% 14.76%
10.18% 9.21% 15.13%
8.78% 8.78% 14.12%
9.43% 12.24% 9.12%
10.82% 11.79% 12.33%
9.03% 15.50%
9.71% 3 Years 15.14%
9.43% 12.70%
5.80% 8.72%
1 Year 15.71%
15.10%
6.00%

6.3 Introducing the Goals-based Lifestage Model
Alexander Forbes’ Lifestage Models allow you to invest depending on the time you have until you
retire. They have evolved over time as better investment techniques have become available. The
latest model aims to give members more certainty about the income they can expect to get when they
retire. This is called the Alexander Forbes Goals-Based Lifestage Model.
The trustees of the Alexander Forbes Core Plan have agreed to introduce the Alexander Forbes
Goals-Based Lifestage Model into the fund from 1 October 2016.
The new model will replace the current Balanced Lifestage Model and Passive Lifestage Model. The
retirement savings of members who are invested in these Lifestage Models will be switched to the
new model on 1 October 2016.
The committee to note the appended detailed communication.
Action: Alexander Forbes to lead the discussion.

10

1 ALEXANDER FORBES UMBRE

UMBRELLA FUND IN-FUND SOL

Alexander Forbes Retirement Fund and Ale

UMBRELLA FUNDS

ELLA FUND IN-FUND SOLUTIONS

LUTIONS

exander Forbes Core Plan

1 ALEXANDER FORBES UMBRE

They leave you YOUR
before they retire. AS THE EM

ROAD A When an employee st
company, this experie
Pre-retirement of their lifelong financ
preservation investment in their fin
through the fund, will
Keeping your savings helping this employee
invested in the fund when milestones in their life
leaving your employer secure their financial
when you resign, or get This being said, the re
retrenched or dismissed with all your employee
the fund, will eventua
one of two ways:

TWO

lead to finan
in ret

ELLA FUND IN-FUND SOLUTIONS

ROLE They work for you
until they retire.
MPLOYER
ROAD B
tarts working for your
ence becomes part Retirement
cial journey. Your living annuity
nancial well-being,
l play a big part in Getting a pension
e reach the important from the fund
e and, ultimately, when you retire
well-being.
elationship you have
es, the members of
ally come to an end in

ROADS

ncial well-being
tirement

2 ALEXANDER FORBES UMBRE

In-fu
to em

The trustees o
created innov
leave their em
These enhanc
trustees to gu

ELLA FUND IN-FUND SOLUTIONS

und solutions offer added value
mployers and members alike

of the Alexander Forbes Retirement Fund and Alexander Forbes Core Plan have
vative solutions to allow members to keep their money invested in the fund after they
mployer as a result of resignation, retrenchment, dismissal or retirement.
ced solutions are in line with National Treasury’s retirement reform proposals that ask
uide members through the retirement process.

The Alexander Forbes umbrella funds can now keep money invested in the
fund when members resign, or are retrenched or dismissed. These funds
can also pay a living annuity as a pension when members retire.

Alexander Forbes is committed to helping your employees, as members of the fund,
to navigate their journey towards financial well-being. One of the ways we do this is
by providing you, the employer, with the information you need to help your employees
understand their choices. In this way, they can make the best decisions for their
personal circumstances along the way.

3 ALEXANDER FORBES UMBRE

New in-fund solutions
mean new ways to save!

These new options provide members with
extra ways to protect their savings and keep
them for what they were originally intended
– a retirement income.

Cost-effective options for members who, on leaving their employer, wish to Me
preserve their retirement savings or use living annuities. This is because fun
investment fees in the fund are much lower than most members would be sta
able to access by themselves. Over longer periods, lower fees can improve stra
retirement outcomes for members.

Alexander Forbes Life is a licensed financial services provider (FSP 1178).

Produced by Alexander Forbes Communications
Photos: Gallo Images

ELLA FUND IN-FUND SOLUTIONS

embers keeping their savings in the Members who stay with you until
nd after leaving their employer can retirement also have more choice, as
ay invested in the same investment they can now get a pension from the
ategy they had while employed. fund through an in-fund living annuity.

11694-AFRF-Br-AFUFIS-2016-08

OPERATIONAL ISSUES

7 ADMINISTRATION
7.1 Administration Report
The fund administrators have prepared the administration report as at 30 June 2016.
Action: The committee to note and discuss the reports.

11

7.2 Authorised signatories
The administrator has recorded that the authorised person to sign fund claim documentation on behalf
of the employer is:
•
The administrator is an “accountable institution” in terms of the Financial Intelligence Centre Act, and
is required to identify, verify, create and maintain records of all clients for at least five years. The
administrator must therefore be provided with a certified copy of the identity document for each
authorised signatory.
Action: The committee is to advise of any changes to the authorised signatories of the fund
and if necessary provide an updated authorised signatory forms and certified copies
of the identity document.

7.3 Bank account
The fund has its bank account with Standard Bank.
Action: The committee to note.

12

8 INSURANCE
8.1 Confirmation of insurance arrangements
All benefits are based on the members’ fund salary, that is, pensionable salary.

8.1.1 Death benefit and lump sum disability benefit
8.1.2
The special rules provide for a benefit of 2 times annual fund salary to be paid in the event
of a member’s death or total and permanent disability.

The details of the insured benefit are as follows:

BENEFIT 2 times annual fund salary
TAX REPLACEMENT COVER No
FREE COVER LIMIT R450,000
INSURER AF Life
MAXIMUM COVER AGE 65 years
CONVERSION OPTION Yes, on withdrawal up to and including retirement
WAITING PERIOD ON 6 months
DISABILITY
REDUCTION OF DIS ABILITY 1/60th of benefit over the last 5 years
BENEFIT
RATE 3.07%
EFFECTIVE DATE 1 October 2016
RENEWAL DATE 1 October 2017

The commission is based on the following regulated scale:
• 7.5% of the first R142 000 gross annual premium income, plus;
• 5% of the next R103 000, plus;
• 3% of the next R284 000, plus;
• 2% of the next R1 021 000, plus;
• 1% of balance.

Funeral benefit

The committee is to note that a funeral policy is in place to assist members financially with
funeral expenses in the event of a death in the member’s family. Premiums are deducted
from contributions paid to the fund and remitted to the insurer.

The details of the insured benefit are as follows:

Member, spouse R18,000

BENEFIT Child age 14 to 21 R18,000

INSURER Child age 6 to 13 R 9,000
RATE
EFFECTIVE DATE Child age 1 to 5 R 4,500
RENEWAL DATE
COMMISSION Child age 0 to 11 months R 2,250

Stillborn R 2,250

AF Life

R32.40 per member per month

1 October 2016

1 October 2017

10% of annual premium

13

8.2 Medical underwriting

The committee is to note that the insurer has set a free cover limit of R450,000 (lump sum benefit) on
the group life assurance & lump sum disability policy on the disability income benefit policy. In terms
of the insurance policies, members who are entitled to cover in excess of the free cover limit are
required to submit evidence of medical health.

Requests for evidence of medical health, together with advice on the implication of not submitting
evidence of medical health, are sent to the relevant members whose benefit entitlements are over the
free cover limit.

The current status of the medical underwriting is as follows:

Members Members Members Members Members
with cover with accepted accepted where
over the limit medicals with cover
outstanding - loading declined

Group life & -- - -
Permanent and
Total Disability

New members and members receiving a salary increase, whose benefit entitlement is over the free
cover limit, are advised of their medical requirements as soon as possible after Alexander Forbes is
notified of these members. In terms of the current process, Alexander Forbes is usually only notified
four to six weeks after the new member joins the fund or the existing member receives an increase.

It is therefore suggested that the employer notify the consultant immediately on the appointment of a
new member (or existing member who has been granted an increase) with an annual fund salary of
more than R225,000 per annum.

Action: The committee to note the current status of the medical underwriting.

14

9 ADDITIONAL ITEMS
The committee may wish to discuss certain additional matters at the meeting.
Action: The committee to discuss.

15

10. DISCLOSURES
The AF Life general disclosure and updated representative disclosure was emailed to the committee prior
to the meeting.
The updated representative disclosures are to be signed at the meeting.
Action: Chairman to sign representative disclosures at the meeting.

CLOSE OF MEETING

16