SA OPEN PROVIDENT FUND KNIGHTS COLLEGE

14 MAY2012

FUND STRUCTURE

SA Open Provident Fund - Umbrella Fund Participating employer – Knights College

Defined Contribution Fund contributions defined benefit dependent on amount of net contributions

plus/minus investment growth

Provident Fund Retirement Age – 60 years

FUND STRUCTURE

SERVICE PROVIDERS

Administrators – Sanlam Insurers

Death - Metropolitan Disability – Metropolitan

Valuator – Krishen Sukdev (ABSA) Investment Manager – Momentum

Manager of Managers (previously called Advantage)

Benefit Consultants - Seshego

CONTRIBUTIONS

Pensionable salary – 70% of TCTC Contributions are shown as a percentage of

salary: Choice – 10%, 14% or 20%

Employer contributions Costs (administration fees, risk costs and

cost reserve) are deducted from contribution

CONTRIBUTIONS CONT.

Costs Admin fee – R35 Death benefit 3x annual pensionable salary – 1.21% of salary 5x annual pensionable salary – 1.66% of salary Disability benefit 0.91% of salary  Cost reserve – R112.19

Cost reserve = Auditor fees, ad hoc costs, FSB levies, etc

CONTRIBUTIONS CONT.

Example: A member with a TCTC of R10,000 pm with a death benefit of 3x

Pensionable salary = 70% of R10,000 = R7,000

10% 14% 20%

Contribution R 700.00 R 980.00 R 1,400.00

Less costs:

Admin fee Flat fee R 35.00 R 35.00 R 35.00

Death benefit (3X) 1.21% of R7,000 R 84.70 R 84.70 R 84.70

Disability benefit 0.91% of R7,000 R 63.70 R 63.70 R 63.70

Cost reserve Flat fee R112.19 R112.19 R112.19

Towards retirement funding R 404.41 R 684.41 R 1104.41

RETIREMENT BENEFITS

100% benefit in cash Part cash and part annuity (annuity is monthly

pension from an insurer) payable for life 100% annuity Tax on the cash portion

Taxable amount Rate of tax

R0 – R315 000 0%

R315 001 – R630 000 18%

R630 001 – R945 000 27%

Amount exceeding R945 000 36%

WITHDRAWAL BENEFITS

Benefit = Share of fund Resignation / Retrenchment / Dismissal Options on exits

Transfer to retirement annuity Transfer to preservation fund Transfer to new employer’s fund Cash Lump sum (taxed)

Tax payable on cash lump sum Up to R22 500 - 0% R22 501 to R600 000 - 18% R600 001 – R900 000 - 27% R900 001 and above -36%

DEATH COVER

Once off choice 5X annual pensionable salary 3X annual pensionable salary NIL cover

Premiums are tax deductible and the benefit taxed in same way as retirement benefit Fund policy (S37C applies) - S37C of Pension Funds Act states:

It is the responsibility of the Trustees to distribute death benefits. Dependants have to be considered before all else

Your Beneficiary Form is an important indication for the trustees as to your wishes

Conversion option Continuation option – cover for disability claimants Exclusions

Active participation in war and riots

DISABILITY COVER

Monthly “salary” on disability Tax payable on monthly benefit as per tax tables

75% of monthly pensionable salary Disability cover not optional Annual Escalation – 5% or CPI 3 month waiting period Personal income disability policy – aggregate fund and personal policy Benefit ceases

Reaches age 60 years (receive retirement benefit) Dies before age 60 years (receive death benefit) Recover

INVESTMENTS

Elect single MIC portfolio Portfolio choices

CPI plus 7% CPI plus 5%(default portfolio) CPI plus 3% Capital guarantee portfolio

MIC PORTFOLIOS

PORTFOLIOS COMMENTS

CPI +7% Suitable for long term capital growth. For members who wish to maximise returns over long term and are capable of tolerating capital loss and volatility in the short to medium term.

CPI + 5% Suitable for moderate capital growth. For members who want a sound return over the medium term and are capable of tolerating some capital loss and volatility over the short to medium term.

CPI + 3% Suitable for targeting some capital growth. For members who do not need high returns to achieve their retirement planning goals, and do not want to tolerate too much risk of capital loss or volatility over the short to medium term.

Capital preservation portfolio

Suitable for a short term investment time horizon. Highly liquid portfolio invested in short term money market instruments. This may be suitable for members with low tolerance for volatility. However, this portfolio is not likely to generate real returns on an after-tax basis.

PORTFOLIO CONSTRUCTION

21.20%

56.50%66.50%

33.00%

11.90%

9.70%

7.60%

9.80%

9.30%

100.00%

24.00%

9.50%4.80%9.40% 9.80% 9.70%4.90% 2.50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Capital Guaranteed CPI + 3% CPI + 5% CPI + 7%

Equities Bonds

Property Cash & Money Market instruments

Alternative Investments Commodity

MEMBER INVESTMENT CHOICE

416,569.58

14,080.20

15,261.83

5,947.43

10.00

100.00

1,000.00

10,000.00

100,000.00

1,000,000.00

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

Rand V

alu

e

Year

Investment of R100 from 1960 to December 2010

Equities Bonds

SHORT TERM VOLATILTY

SESHEGO BENEFIT CONSULTING

WHAT IS BEING MADE AVAILABLE

Member Booklet Special Rules New Member Presentation Member Investment Choice Summary Sheet November 2011 Fund Fact Sheets Annual Trustees Report (2011) Communiqué: Q4 of 2011 Registration process for Retirement Fund

website Expression of Wish Form A website page with the communication on

www.saopenfund.co.za

QuestionsQuestions