Pension Fund Contribution

[Maelly]

My contract states that .....The Organization contributes 8.5% Pension of Basic Rate and the figure is e.g. R24k

How do you interpret this:
1. Does the org pays R2k to your Pension Fund monthly, or
2. The org deducts R2k off your basic to your Pension Fund monthly?

Well, I did ask for a dummy pay slip sometime last year and the PensFund is actually deducted off my basic

So, basically they shouldnt put this clause cause I am ultimately paying for my pension fund, right?

If so, currently I do have my own RA, can I ask the Org to rather not deduct that R2k p/m off my Basic and I can add it to my RA or do whatever I wish?

Thanks

 

[Deenem]

It's usually done on a 50/50 , so they pay 8.5% and you pay 8.5%, they pay 2K and you pay 2K.

It's usually a company scheme as well, so they won't pay into another RA.

 

[Maelly]

Is that so, hhmmm, I will find out from my HR.
I just need more info before confronting her.
Thanks

 

[CathJ]

Depends on whether you're paid on a cost to company basis or not.

If your salary is, say, 10K cost to company, they'd pay R850 out of your 10K.
If it's not, you'd get your 10K and they'd pay an extra R850 (so your total benefit would be R10,850).

Most companies make it compulsory, so no, you probably wouldn't be able to ask for the full amount and then pay into your own RA (but it's worth asking). They get tax benefits for paying into your pension fund, you see

Also, you'll find that when you leave and you get your pension paid out or transferred, you won't generally get their contributions, only yours - so the whole thing becomes pretty meaningless.

 

[Fuma]

It's usually done on a 50/50 , so they pay 8.5% and you pay 8.5%, they pay 2K and you pay 2K.

No such thing as "they" pay. Every contribution is from CTC. If they say your annual package is say R200k - all these Pension fund, medical aid, etc are from that R200K.

 

[Maelly]

Depends on whether you're paid on a cost to company basis or not.

Well my contract reads as follows:
X amount annual basic
PLUS:
X amount Bonus (it's actually a 13th cheque)
X amount MedAid (Co. cont 67%) this I do understand. So if yr MedAid cost 1.5, I pay 33% and the co. pays 67%. Crystal clear
X amount Pension (Co pays 8.5% of my basic). However, Acc to the dummy payslip I pay like. e.g R2k. All I want to know is how much do they pay? as in how much is the actual cost of my pension contribution? Well, I will find out soon.
X amount Car
X amount House and,
X amount Education

They get tax benefits for paying into your pension fund, you see

Ah, so thats the case

Also, you'll find that when you leave and you get your pension paid out or transferred, you won't generally get their contributions, only yours - so the whole thing becomes pretty meaningless.

What a rip-off

 

[supersunbird]

Also, you'll find that when you leave and you get your pension paid out or transferred, you won't generally get their contributions, only yours - so the whole thing becomes pretty meaningless.

I thought that was against the law.

 

[supersunbird]

Well my contract reads as follows:
X amount annual basic
PLUS:
X amount Bonus (it's actually a 13th cheque)
X amount MedAid (Co. cont 67%) this I do understand. So if yr MedAid cost 1.5, I pay 33% and the co. pays 67%. Crystal clear
X amount Pension (Co pays 8.5% of my basic). However, Acc to the dummy payslip I pay like. e.g R2k. All I want to know is how much do they pay? as in how much is the actual cost of my pension contribution? Well, I will find out soon.
X amount Car
X amount House and,
X amount Education
Ah, so thats the case
What a rip-off

They would pay R2000 if that is what you're paying. So say you've been working for 10 months, there should now be R40 000 in there + whatever the fund has earned through investments.

 

[iDOL]

Depends on whether you're paid on a cost to company basis or not.

Also, you'll find that when you leave and you get your pension paid out or transferred, you won't generally get their contributions, only yours - so the whole thing becomes pretty meaningless.

That is no longer valid, legislation has taken away what was known as vesting, so when you leave their employ you are entitled to your full benefit.

 

[CathJ]

That is no longer valid, legislation has taken away what was known as vesting, so when you leave their employ you are entitled to your full benefit.

I thought that was against the law.

Ah, didn't know it had changed! That's great, I always thought it was a huge rip-off whereby the company could look good but not actually help you in the least

 

[Deenem]

Also, you'll find that when you leave and you get your pension paid out or transferred, you won't generally get their contributions, only yours - so the whole thing becomes pretty meaningless.

Huh? Once it's in it doesn't come out until you're 55, but their contribution definately stays in there, even if you resign.

 

[CathJ]

Huh? Once it's in it doesn't come out until you're 55, but their contribution definately stays in there, even if you resign.

What I'm talking about is if you leave the company, and withdraw the funds to move into a preservation fund (for example - it doesn't have to stay in the exact same pension fund until you retire), you used to only get your contributions transferred, not theirs. This has apparently been changed.

 

[BigAl-sa]

Huh? Once it's in it doesn't come out until you're 55, but their contribution definately stays in there, even if you resign.

Depends on your conditions of service, mine says after 10yrs I get the whole lot. On my annual statement form the pension/provident fund, the resignation amount says I get the whole lot. Of course, a huge amount will go to tax if I resign...

 

[supersunbird]

Depends on your conditions of service, mine says after 10yrs I get the whole lot. On my annual statement form the pension/provident fund, the resignation amount says I get the whole lot. Of course, a huge amount will go to tax if I resign...

No, not if you transfer it all to another pension fund type thing

 

[Maelly]

Thanks guys... I will get more info from them and hopefully feedback (if the thread would still be available)

 

[Barefoot Billionaire]

Ah, didn't know it had changed! That's great, I always thought it was a huge rip-off whereby the company could look good but not actually help you in the least

CathJ, if you left a company retirment fund before legislation changed (about 4 or 5 years ago), check that you are not due a part of the fund surplus. I resigned from Sanlam in 2000 and got quite a lot of money back from them 3 years ago. Best person to contact is your ex-retirement fund administrator.