If something should happen to you by monkey6


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									Retirement Matters
Focusing on your retirement fund needs, your future August 2004

If something should happen to you
Many of us have had a narrow escape from death… dodging a speeding car; a hijacker’s bullet or something that threatens to take us away from those we love, forever. Don't wait until one of these things happen to you before taking action to ensure that your loved ones will be taken care of should you die.
Although the main aim of a retirement fund is to provide you with a benefit when you retire, many companies offer what is called ‘risk benefits’. These are benefits that are paid out should you die while still working for your company (death benefit) or become disabled (disability benefit). The knowledge that your loved ones will receive an income if you die while still working, offers most of us peace of mind.

Dear Member…
With all the recent developments in the retirement fund industry, the Board of Trustees of the Orion Umbrella Funds (the Funds) have identified the need to communicate more regularly to members of the Funds. That way, you can be kept up to date of legislative and other changes that may affect your benefits. It therefore gives us great pleasure to present you with the first edition of Retirement Matters, a brand new newsletter produced especially for all members of the Funds! The aim of Retirement Matters is to: • take the confusion out of retirement fund matters by explaining your benefits in easy to understand language, • serve as a mouthpiece to address the concerns of members, • keep you updated on any changes to the Fund, as well as • general financial education, and more! Please assist us in providing you with an informative newsletter by giving us your feedback. Refer to page 4 for contact details and also see how you can stand a chance to win a prize. We trust that you will find the information in this newsletter useful.

Will your family be protected should you die?
Did you know that your company offers a death benefit to your dependants? Equally important, do you know how much it is, to whom it will be paid and how long it will take to be paid? The rules of the Orion Umbrella Funds, together with the special rules for your company, will determine how much your dependants will receive. By law, the Trustees of the Orion Umbrella Funds have to follow what is known as the 'death benefit distribution process'. Their actions are guided by the provisions of the Pension Funds Act (Section 37C).
Turn the page to find out more...

Jonathan van Oordt Principal Officer

A newsletter for the members of the Orion Umbrella Funds

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The Trustees’ role
When Vusi died tragically in a car accident, he left behind his young girlfriend and their two-year-old son. Vusi also had a son from his previous marriage, and was paying child support. When he completed his beneficiary nomination form the previous year, Vusi listed only his mother and his two-year-old son as his beneficiaries. While the Trustees took Vusi's beneficiary nomination form into account, they had to make sure that his death benefit was distributed equitably among the dependants. After much investigation and a long period of time (9 months), the Trustees allocated his death benefit to his mother, his son from his previous marriage, his former wife and his girlfriend and the balance was placed in a trust fund for his two-year-old son. Why had the Trustees paid Vusi's benefit to people who were not listed on his beneficiary nomination form?

Read the process below to understand how the Trustees of the Funds distribute a death benefit.

How long will it take?
The payment of a death benefit is subject to the rules of the Fund as well as the law: the Pension Funds Act. Before distributing the death benefit, the Trustees of the Funds are required to ensure that they follow strict guidelines as to whom the benefit be paid to, and that they are fair and reasonable. the age of the parties; the relationship with the deceased; the extent of dependency; the financial affairs of the dependants; and the future earning potential and prospects of the dependants. Refer to the example of Vusi above. The Trustees established that his former wife, son from that marriage, girlfriend and two-yearold son were financially reliant on Vusi – they had a financial need. Vusi should have included all his dependants on his beneficiary nomination form. (It may have helped to speed up the death benefit distribution process.) 3. Dividing the benefit If you have dependants, the Trustees will now determine how much each one should receive, based on their objective assessment and using their discretion. If you have nominated a beneficiary who is not a dependant, the Trustees may override any nomination you have made, if they believe there is a valid reason. If you have NO dependants, but have nominated people you would like to receive part of your death benefit (nominees), the Trustees will probably pay these nominees as you have indicated on your beneficiary nomination form.

The process…
1. Tracing and pooling dependants The Trustees must first trace your dependants, if any. Your beneficiary nomination form is used to help the Trustees with this process. The investigation must be very thorough and Trustees have up to 12 months to complete this. All your beneficiaries (dependants and nominees) must then be pooled together. 2. Establishing need Trustees must now consider the financial need of all your beneficiaries, rather than look at how much these people would expect to receive, because of their relationship to you. Although their relationship to you is important, it’s only one of the factors considered. While financial need or existing dependency may be the most important factor, there are other factors the Trustees must consider:

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It is important to remember that the Trustees must hold an investigation before paying any death benefits. The purpose of the investigation is to determine who the deceased's dependants are, as described in the Pension Funds Act, and to follow the process as described on page 2.

Keep your beneficiary nomination up to date
You can make the Trustees of the Orion Umbrella Funds’ task far easier, and potentially speed up payment, by keeping your beneficiary nomination form up to date and ensuring that it reflects all your dependants. You will need to make changes in the following instances: • Birth / death of child • Death of spouse • New spouse • New beneficiary, e.g. should your parents became financially dependant on you

Who looks after your retirement fund?
There are a number of people who have a role to play in the running of the Orion Umbrella Funds. At the forefront is the Board of Trustees.

The duties of the Trustees…
The Trustees are responsible for the day-to-day running of the Fund. For instance, the Trustees must: manage the Funds in a well-organised and transparent way; manage the Funds’ investments by selecting competent investment managers; distribute death benefits to beneficiaries in a fair manner; communicate regularly with members; respond to disputes and prevent conflicts of interest; know and understand the Rules and any laws that affect the Funds. While this may sound pretty straightforward, an enormous amount of responsibility goes with it. The Trustees carry out these duties within the framework of the law ruling retirement funds (The Pension Funds Act), and ensure that your interests are best served.

But who are the Trustees and what is their role?
The Trustees of the Orion Umbrella Funds are an independent group of professional people. The Trustees of your Fund are: Mr J D Filmalter (MBA, FILPA, AIAC, HIAA) is currently the Chairman of the Board of Trustees. He is retired and has 35 years’ experience in the retirement fund industry. Prof H Lambrechts is a lecturer at the University of Pretoria for the Department of Finance. Prof C Greeff is an independent actuary and was also a former lecturer of actuarial science at the University of Stellenbosch. Mr S Nyoka (B.Com. Economics) is currently the Divisional Manager: Employee Benefits Member Services Manager. Mr R Stevenson is Senior Legal Adviser at Old Mutual Employee Benefits Legal Services. He is also a member of the Institute of Retirement Funds’ Legal and Technical Committee, as well as a convenor of the Life Offices Association Retirement Funds Standing Committee. Mr T Fellowes is a Chartered Accountant for Old Mutual Employee Benefits Finance.

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Are you on the right track?
Are you and your family financially prepared for the future, or for any unplanned events, as you would like to be?
See if you are on the right track to financial security by answering a few easy questions.
Tick YES or NO


I have a budget and I usually stick to it. I know what benefits are payable by my fund. I have made sufficient provision for my family in the event of my death or disablement. I am prepared for a financial or medical emergency. I know how my income is affected by tax. I have prepared sufficiently for my retirement. I have made sufficient provision for my children’s education. I have an up-to-date will. I regularly consult my financial adviser to update my financial planning and my beneficiary nominations.



How did you ra te?
If you answered ‘yes’ to all the questions, you and your family can probably look forward to a secure financial future. If you answered ‘no’ to two questions, certain aspects of your financial planning need to be addressed. into the future. Consider discussing your financial planning with your financial adviser, who can assist in drawing up your plan.



If you answered 'no' to more than two questions, you may want to consider drawing up a financial plan for now and

Mail Bag
We want your feedback. Write to us: e-mail: Post: retirementmatters@oldmutual.com Retirement Matters PO Box 81 Mutualpark 7451

Answer this question: Who is responsible for distribution of the death benefits of the Funds? Each of the first 3 correct entries drawn stands a chance to win an Orion braai pack. Send your answers via e-mail or the post to the Retirement Matters Mail Bag (see details on the left). Competition closes on 31 October 2004.

For any queries regarding your Fund, please call: 0860 20 30 40

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