Fund and Industry Development
Members are reminded of the following changes that came into effect on 1 March 2021:
Retirement Reform Changes
Retirement benefits from provident funds are now treated in the same way as pension funds.
The fund has implemented a phasing-in approach for default portfolio switches.
THE PROTECTION OF PERSONAL INFORMATION (POPI) ACT officially came into effect on 1 July 2020 and companies have 12 months from this date to fully comply with the Act. The purpose of this legislation is to protect the personal information of citizens and it has strict regulations that every company, including the NFMW, must comply with.
One of the fund’s obligations is to ensure that security measures are put in place to protect members’ personal information. It is therefore important to note that ** the fund may not provide a member’s personal information to a third party**, unless the member provides written consent. For more information on the POPI Act, visit www.popia.co.za.
Answering the Questions on Retirement Reform
We have provided the answers to the the most frequently asked questions received from members on the retirement reform changes.
Q: Please confirm whether I will be able to have a portion of my benefit that I have saved up to 1 March paid out to me in cash now ?
A: Benefit payments are only made when you end service, i.e. resign or retire from your employer. You therefore do not have the option to have a portion of your savings paid out to you whilst still in service.
Q. I’d like to get clarity on the retirement reform - I just do not understand what you mean when you say 2/3 of my income must be used to buy a pension.
A.At retirement, the benefit accumulated after 1 March 2021 will be paid as one-third in cash to you and two-thirds must be used to purchase a post-retirement product (life or a living annuity) in order to receive a monthly income/pension. You can either make use of the NFMW post-retirement products or make use of an independent insurer. If the benefit accumulated after 1 March 2021 is less than R247 500, you can choose to take the total/full benefit as cash lump sum.
Q. I am older than 55 and will be retiring within the next five years , do I need to complete any forms now to inform the fund of how I want my benefit to be paid out to me at retirement?
A.There are no actions required from you now, the claim forms will be completed when you retire. You will then have the option to take the full benefit as a lump sum payment.
**Q. What do you mean when you say the outstanding housing loan balance will be deducted proportionately from my benefit when I end service? **
A.After 1 March 2021 your fund credit consists of two portions: Old money (savings accumulated up to 1 March 2021 plus interest/growth accumulated thereafter) and; New money (all contributions made after 1 March 2021 plus the interest/ growth accumulated thereafter) Example: if your old money makes up 70% of your total fund credit and the new money 30%, the housing loan deduction will be made proportionally according to these percentages. This means that 70% of the housing loan balance will be deducted from the old money and the other 30% will be deducted from the new money.
Latest Investment Portfolio Returns
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The fund was converted to operate on a fully unitised investment and administration platform from the middle of August 2020. This new strategy allows the fund to calculate members’ returns on a daily basis.