Employee Benefits

A Pension Fund is established by an employer to facilitate and organise the investment of employees' retirement funds contributed by the employer and employees. The pension fund is a common asset pool meant to generate stable growth over the long term, and provide pension for employees when they reach the end of their working years and commence retirement.

A Provident Fund is established into which the employer and the employee both pay money regularly, so that when the employee retires or leaves the company, the employee receives a sum of money. The establishment of the said fund is primarily for pension provision purposes.

Group Retirement Annuities are very similar to RAs, but the main difference is that while RA premiums are paid either by the employer, or by both the employer and employee, group RA premiums can only be paid by the employer.

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Group RA premiums can be from pre-tax or after-tax contributions. An employee can transfer accumulations from other investment choices under the employer's plan to the group RA contract.

A group medical scheme is a medical aid plan that is offered by an employer to their employees as part of their employee benefits package. It is designed to provide healthcare coverage to employees and their dependents at a group rate, which can be more affordable than individual health insurance plans.

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Group medical schemes have lower premiums and better coverage than individual plans because the risk is spread across a large group of people. The insurance company can negotiate lower rates with healthcare providers since they have a large pool of insured individuals.

A group life policy is the most cost effective way of providing life insurance because of its compulsory nature and the fact that a group of people are linked to the same policy which provides cross subsidisation. 

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Group life policies are affordable and accessible to the masses. To top it all it is a very easy process to establish a group life policy with limited underwriting and a very simple administration process. With annual renewals it gives employers and employees an opportunity to review their benefits every twelve months.

Tax concessions for retirement funds provide a valuable incentive for both employers and employees to save for retirement and secure their financial future.

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Employees can make contributions to a retirement fund, such as a pension or provident fund, up to a certain limit set by the government. These contributions are tax-deductible, meaning the employee can claim a tax deduction for the contributions made towards the fund. The amount that can be deducted is subject to certain limits and rules set by the South African Revenue Service (SARS).

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Employers are also required to contribute to their employees' retirement funds, and these contributions are tax-deductible for the employer. The amount that can be deducted is limited to a percentage of the employee's salary, which is determined by the government.

Trustees of pension or provident funds have extensive fiduciary responsibilities placed on their shoulders. In order to ensure that they are adequately equipped to fulfil this important role, Optimum Employee Benefits have great pleasure in offering a comprehensive trustee training course. Quotations for this course can be provided.

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The course is designed to train trustees to understand the legal duties of a trustee, to interpret the rules of a fund and to understand the legal framework in which retirement funds operate, and all other aspects of being a trustee of a retirement fund.

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These trustee training courses can be customised to the clients' needs. A quotation for such course can be provided upon request.

Optimum's employee benefits consultants  are keeping up with legislative changes within the retirement fund industry. They are constantly assessing the impact of theses changes which affects the client and employer as well as the benefit expectations of members and employees, and provide recommendations accordingly.

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Optimum Employee Benefits also provide legal and industry updates, and advise as to the potential impact on the retirement arrangement. 

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A monthly newsletter on such legal notes is published on our blog.