Frequently Asked Questions

/Frequently Asked Questions
Frequently Asked Questions2016-11-30T17:40:09+00:00

Chartered Employee Benefits is committed to member education, believing that an empowered employer and employee make more sensible decisions about their finances and the well-being of all in their company.  In keeping with this approach, here are some of the most commonly asked questions by those considering engaging the services of an Employee Benefits Financial Planning company.

Healthcare Benefits Questions

The sad fact is that medical aid is viewed by many individuals as a grudge purchase akin to buying insurance for one’s vehicle.

“I am healthy and that will never happen to me” is a common statement.
It’s well known that the public healthcare system does not meet the needs of our population and many citizens will opt for a private medical aid to meet their individual or family’s medical funding requirements.

At the very least you want to ensure you have sufficient cover to pay for medical expenses in the case of a planned or emergency event that may burn a hole in your pocket.

The medical aid industry – and specifically the medical plans on offer – is highly complex and require interpretation. In light of current and pending financial services regulation, the onus falls on the adviser to explain a product and to match it to a client’s needs. At Chartered, we pride ourselves on being able to assist you to select the right plan based on your needs; we want you to leave the meeting understanding the benefits you have purchased.

In certain cases, you may require us to champion your cause and challenge a decision handed down by a medical aid in respect of a claim or procedure. We have sufficient experience in our field to assist members where they may have a valid claim, barring cases that require legal intervention.

Call centres may cause you endless frustration and thus we have adopted a personal approach whereby a dedicated staff member will deal with your query and see it through until resolution. We hope that our quick turnaround times and personal touch impress rather than frustrate you.

Our fees are built into the monthly contribution paid to the medical aid. They are regulated by the authorities and paid directly to us by the medical aid. Clients perceive value in our service and hence we set out our service levels in agreements that are signed with our corporate clients. We also negotiate fee-based services for employers where a need arises.

Employee Benefits Questions

This depends on what your income requirements are at retirement.  As a guide, you should have built up enough capital during your working lifetime to be able to draw an income of at least 70% of your final salary at retirement. This ‘70% of salary’ is called a ‘net replacement ratio’ (NRR) and there are calculators available on the web where members can plug in information such as their current retirement value and other variables to determine how far they are from achieving their NRR. Note that every individual’s circumstances are different as they may have other income streams and do not solely rely on their retirement fund, for example, property income.
Find out from your advisor whether the insured benefit policies (both with your employer and any that you may have taken out in your individual capacity) cover you for disability.  The insured disability benefits is an insurance that can pay out if you are no longer able to work and generate an income.
If you have a retirement fund and death benefits, these benefits will be paid out to your beneficiaries and / or financial dependants.  You will need to make your family aware of the death benefits that you qualify for by keeping yourself informed and also ensure that your beneficiary nomination forms are always up-to-date to ensure that these benefits are paid out sooner.
The options are:

1. Transfer to your new employer’s fund,
2. Transfer to a preservation fund,
3. Transfer to a retirement annuity fund, and
4. Take the benefit in cash.

There are various implications of each choice.  Ensure that you are well-informed with the decision that you take, especially the taxation that is paid from a pension to a provident fund, and taking the benefit in cash.  If you are transferring to your new employer’s fund, ensure that you are satisfied with the management of that Fund, that is, how the assets are invested, how the management committee or Trustees are running the fund, for example.

If you have chosen to take your retirement benefit in cash, be aware that your benefit will incur a substantial amount of tax.  It is advisable to keep your retirement savings for retirement so that you can build up enough capital to help you to draw the recommended income of 70% of your final salary at retirement.

How long will it take to pay out your benefit in cash?  Most administrators of a retirement fund wait for your last contribution to be received before they are able to even begin with the ‘claim process’.  The guideline for the pay-out is usually six weeks from the month in which you exited. If your tax affairs are not in order, this may take longer as you will need to resolve this with SARS first; for example, if you leave on 12 February, as a guideline, your benefit should be paid out to you six weeks from the end of February, that is, mid- April.

If the rules of the fund allow for the fund to stand surety for a home loan, and if the management committee has approved this, you will be able to apply for a home loan.  This should not be mistaken for your fund paying you a benefit, but rather a bank provides you with the credit, and you still pay off the loan.  Your retirement fund merely stands surety for the loan, that is, if you leave your employer, the loan will always be repaid from your retirement fund savings.  In terms of pension law, the loan must be used for home loan purposes, for instance, for extending, building, repairing a home.  It is illegal to use the loan for any other purpose and you may be subject to disciplinary action. If you had to apply for a home loan with any bank, you would be subject to the same process as if you had to apply for a home loan with your fund standing surety.  This is because the National Credit Act has placed an onus on banks to ensure that people are able to pay back their loans given their income and expenditure.  If you apply for a home loan with your retirement fund standing surety, you need to be aware that your outstanding loan will be paid off if you leave your employer and your retirement savings will therefore be reduced.
You may be able to access your retirement fund value on the website.  Contact your human resources (HR) department for your pin and password; alternatively, you can contact the administrator of your retirement fund for assistance.  You should also be receiving an annual benefit statement from the administrator showing your retirement fund value.  If you have not been receiving any statements, contact your HR department to find out why.
What value does an employee benefits consulting firm add? Chartered provides the management committee of your retirement fund with professional advisory services which allow your employer to make informed decisions relating to your employee benefits.  Chartered further holds member education sessions to educate the members about their retirement fund, insured benefits and industry-related updates.