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Unilever SA Pension Fund Magazine | Issue 1 2011
pensions
perspective
ISSUE 01 2011
Message from the Editor
Dear Colleague,
This is the 1st of our newsletters for active members. We hope you find
it useful.
Too often we find that members ignore their financial well being until Got a question?
it is too late. The most common excuse for not paying attention to
retirement saving matters is “work is hectic and there isn’t any time”. Should you have any queries or
We urge you to find the time to acquaint yourself fully on your retirement suggestions please send your
matters. correspondence to:
Following the successful 2010 Pensions Open Day, we plan a similar Rukesh Ramduth
programme countrywide. Members who want a one-on-one discussion Unilever SA Pension Fund
can make an appointment with a colleague from the Fund. Sites will be P O Box 1029
advised of dates shortly. Durban
4000
Your comments and / or suggestions are very important to us and we
would welcome your input for future newsletters. or email:
rukesh.ramduth@unilever.com
In addition, kindly assist the Fund in an assessment of its communications
by completing the survey on page 13 and stand a chance to win a R1000
Woolworths gift voucher.
Best Wishes
Rukesh
Rukesh Ramduth
Contents
10
4 6
11 12
14
03 Introduction 08 Investment Portfolio 12 Basic Guide to Claim
A brief introduction to the Changes Unemployment Benefits
Unilever South Africa Pension We keep you informed of How, what and who can
Fund. changes to the current claim
scheme
04 The Pension Fund Trustee 13 Pension Queries
Board 09 Are your investments in Find out who to contact if
Find out who’s who on the line with your retirement you have a query
Board plan?
It’s never too early to start Pension Survey
05 Investing is for the long planning for the future. Complete our online survey
term and be entered into a lucky
Find out what ‘riding the 10 The Unilever In House draw to win a R1000
wave’ is all about and what Annuities for Retirees Woolworths voucher.
investor reactions are to dips Your options on retirment
and increases in fund 14 Fun Stuff
performance. 11 Divorce: Clean break Try your hand at a Suduko
principle or word puzzle.
07 South Africa joins BRIC Know the law
We have joined the ‘club’
of countries with the
fastest growing economies
01 02
Introduction The Unilever SA Pension Fund is largely self-administered with an In-House team operating from the La Lucia Ridge office. Alexander Forbes is the appointed Actuary to the Fund and also perform a range of administration services involving record keeping, unitization of member values and the payment of pensions. No Unilever SA Pension Fund money is held by Alexander Forbes. The Fund’s Investment Consultant is 5Quadrant and the Fund’s Custodian is Nedbank. Funds are invested on instruction from 5Quadrant via Nedbank upon receipt of the appropriate Trustee mandate following recommendation from the Pension Fund Investment Committee. 03 04
> FUND INFORMATION
The Pension Fund
Trustee Board
We now have twelve Trustees, six
elected, five company appointed
and one independent.
Changes
2010 Mr E Hall (Chairperson)
Preggy Govender retired Miss K Zarnack
David Scott resigned
Employer Appointed Mrs A Irvine
Mr N Sithole
2011 Mr E Erasmus
Karl Muller has resigned as Trustee Mr D Weil (external)
as he has moved within the business
to Singapore.
Gary McGaghey has resigned as Mrs C Broadhurst
Trustee as he has moved within the Mr N Chetty
business to the UK Mr J Gcabashe
Member Appointed Mr C Mashigo
We welcome Nuns Chetty, who Mr B Dalberg (Pensioner)
replaces Lionel David from Maydon Mr I Fergusson (Pensioner)
Wharf / Phoenix, and Antoinette
Irvine and Karin Zarnack who replace
David Scott and Gary McGaghey
respectively.
Investing is for the long term
In May 2009 South Africa was reaction usually rules over logical the market performs negatively.
officially declared in recession for thinking and this is exactly what’s This means that when the market
the first time in 17 happening in South does pick up (and it will), your
years. By the end of Africa. Many people are investment won’t be able to take
2010 South Africa’s Volatility is the tempted to switch their advantage of the positive returns
economy started tendency of the value investments, including to the extent it would have if you
recovering slowly, of an investment to go their retirement fund remained invested in a high equity
but the economic up or down over short savings, out of high portfolio and not switched to cash.
environment is still periods of time. equity portfolios
uncertain, with some (portfolios invested The biggest risk to the success of a
parts of the world in shares) to more good long-term investment strategy
recovering while others continue to conservative portfolios that are is your emotions as the investor.
struggle. mainly invested in cash. The chart below shows the typical
cycle of an investor’s emotions and
Investor reaction The problem is that by reacting explains why investors should be
this way to the volatile market, careful not to over-react to short-
When it comes to money, emotional you ‘lock in’ the loss suffered when term volatility.
Point of maximum
financial risk
“Wow , I feel
great about this “Temporary setback.
investment.” I’m a long-term
Emphasis investor.”
Anxiety
Thrill
Excitement Denial
Fear
Point of maximum Optimism
Optimism
Desperation financial opportunity
Panic Relief
Capitulation Hope
Dependency
Depression
“Maybe the markets
just aren’t for me.”
Chart Source : W estcore Funds / Denver I nvestment Advisors L LC 1998
Chart Source: Westcore Funds / Denver I nvestment Advisors LLC
1998
05 06
> GENERAL
Cash - the dangers! for the day you retire, it is important and past performance is never an
for you to include equities (shares) indicator of future performance.
Cash is generally considered the in your overall strategy. When you When you invest, especially towards
safest investment because the are younger your tolerance to risk your retirement, you must take
value of your capital will not drop. is higher, so you can afford high a long-term approach. Switching
By switching from a high equity exposure in the markets and the from the volatility of the markets to
portfolio to a cash-based portfolio, short-term volatility that comes ‘wait it out’ in cash may make you
your returns will be more secure with it. Over the long term, the sleep better at night – for a while
and it’s unlikely that your capital share markets are proven to grow – but the fact remains that you
will decrease. However, the long- in excess of inflation. Remaining probably won’t beat inflation and
term investment returns earned on invested in equities (shares) even in the long term, your investment
cash are usually poorer than those when volatility occurs, is the right returns won’t be enough for a
of all the other asset classes. approach to your overall retirement comfortable retirement.
planning strategy.
You need a long-term strategy when
you save towards your retirement. Timing the markets is dangerous
To build up a big enough lump sum You cannot time the markets
South Africa joins BRIC
South Africa was formally admitted President Jacob Zuma feels that
as a member of the BRIC nations South Africa’s “participation in
on 24 December 2010. The BRIC BRIC would mean that an entire
acronym was coined in 2001 to continent that has a population
refer to the ‘club’ of countries with of over one billion people will be
the fastest growing economies. represented.” Points from the
Brazil, Russia, India and China McKinsey report:
(BRIC) hold a combined GDP of Africa – a good place to be
$18.5 trillion. The BRIC countries
are not formally linked but have South Africa is seen as the gateway • In 2008 Africa’s collective
held summits and taken steps to to Africa, even more after North GDP was $1.6 trillion,
boost financial cooperation and African countries Egypt and Libya roughly equal to that of
investment opportunities among have been confronted with social Brazil and Russia.
them. disorder. Africa is fast becoming
popular for global investment. • Africa has 60% of the
New opportunities The McKinsey Global Institute has world’s total amount of
recently produced a report that uncultivated land.
Being a full member of BRIC will details the progress and potential
open up new investment and trade of African economies. Together • 20 African companies have
opportunities for South Africa. with the McKinsey Report and a revenues of at least $3
Private companies may find market recent BBC poll that rated South billion every year.
access into the BRIC countries Africa second to Brazil in terms of
easier and partnerships from this its global influence as an emerging • By 2020, 128 million
might develop. Many economists nation, our country is becoming African households will
also believe that drawing South an example of the democratic have a flexible income.
Africa into this group underlines possibilities within Africa.
the country’s growing international
role. Once South Africa joins BRIC, Source:
our country will be in a different www.southafrica.infO
league and so service delivery and www.sagoodnews.co.za
performance will have to improve.
07 08
> FUND INFORMATION
Investment Portfolio Changes
The member offshore allocation Portfolio only has exposure to If you are invested in any of these
limit of 20% has been increased developed and not the emerging portfolios, please take note as your
to 25%, effective 1 December section of the markets. Exposure to investment has been realigned with
2010. A further development is the the Emerging Markets investments the changes mentioned.
introduction of Emerging Markets may only be obtained via the
investments on the same date. Capital Growth and Stable Growth See changes to the pre-mix
portfolios. portfolios below:
At present, the Funds Global
OLD NEW
Capital Growth Portfolio Capital Growth Portfolio
SA Equity SA Bonds SA Property SA Equity SA Bonds
SA Property International Equity - Developed
International Equity International Bonds
International Equity - Emerging International Bonds
6.0% 6.0%
4.9%
14.0%
14.0%
6.6% 49.4% 44.5%
6.6%
24.0%
24.0%
OLD NEW
Stable Growth Portfolio Stable Growth Portfolio
SA Equity International Equity SA Property SA Equity International Equity - Developed
International Equity - Emerging SA Property
SA Cash SA Bonds SA Cash SA Bonds
19.4%
21.5%
10.0%
45.0% 45.0%
10.0% 2.2%
3.5%
3.5%
20.0%
20.0%
Are your investments in line with
your retirement goal
On meeting people leaving the The Unilever Default Lifestage looks channels to carry them in the
business at the point of retirement, to protect funds as our members retirement years. They then make a
it is scary to find out that not many near what is the most likely new choice of investment channel/s
people have been giving their Fund retirement age. As such, anyone at the time of retirement.
benefits the attention it warrants. not making an own investment
choice is automatically invested in Whether members have over the
Members rarely bother with the Unilever default which is age transition period lost earnings
managing their benefits in line driven. Here, members’ funds are opportunity is a question that
with their retirement goals. In automatically transitioned from strikes them too late. To position
fact, members should have an idea the Capital Growth Portfolio to the members in a pre-mix with an
of what retirement products are Income Protection Portfolio from adequate array of investments at
available, what type of product the of age 53 to 57. This happens age 57, the Fund has introduced a
they would be suited to, what in 20% chunks until the member 2nd Lifestage model called the Own
the associated costs and risks is 100% invested in the Income Choice Lifestage See inserts below.
are with that product, and what Protection Portfolio at age 57.
commencing income level and Members are free to contact the
annual increments they would be The Income Protection Portfolio Pension Fund team to discuss the
comfortable with, and which will would suit members wishing to merits of the different types of
prove to be sustainable. invest their retirement savings into Lifestage investments.
a Life Annuity. With the majority
No matter where you invest in of members predominantly retiring
retirement or what type of product into Living Annuities, they usually
you choose, it is important that find that the Income Protection
you know exactly where you are Portfolio does not have a diverse
invested well before retirement. enough selection of investment
Unilever Default Lifestage
Capital Growth Portfolio Income Protection Portfolio
100%
80%
60%
40%
20% Own Choice Lifestage
SA Equity SA Bonds
0% SA Cash SA Property
= Age 57 International Equity - Developed International Equity - Emerging
International Bonds
100.00%
50.00%
0.00%
= Age 57
09 10> ADVICE
The Unilever
Inhouse Annuities
for Retirees
Members leaving the business have Contribution Fund Pensioners now
over the years increasingly opted to make up a significant 13% of the
remain within the Unilever fold in Fund.
retirement.
Total Fund Size R 5 074 000 000
Of the funds set aside for pension With-Profit
purchase, retiring members are Pensioners R 155 300 000
required to take up a minimum Living Annuity
Unilever With-Profit pension of Pensioners R 515 900 000
R 1700 per month. Thereafter the
balance of the dedicated annuity Herewith a comparison of the
funds may be invested in the With-Profit increases against
Unilever Living Annuity. Through some of the leading insurance
this mechanism, the Unilever SA companies.
Pension Fund brings huge cost
savings to its retiring members.
Here are some facts on the Fund as
at 31 December 2010. The DefinedDivorce: Clean break principle
The Divorce Amendment Act, 1989 withholding tax from the member
provides that a party to a divorce which was contrary to the Act.
action may share in the ‘pension
interest’ of the member of the Industry had a meeting with SARS
Fund. and National Treasury with the
aim of resolving this issue. Going
The Pension Funds Amendment forward National Treasury’s policy
Act (“the Amendment Act”), which decision is that no pension interest
was promulgated with effect from (or portion thereof) assigned to a
13 September 2007, introduced non-member spouse in terms of a
a “clean break approach”. This divorce order granted prior to 13
allowed a non-member spouse to September 2007 will be subject to
immediately claim a portion of the tax if the benefit accrues on or after
member’s pension interest, in terms 1 March 2009. Neither the member
of an enforceable divorce order nor the non-member spouse will be
granted on or after 13 September liable for tax.
2007.
SARS have confirmed that when
The Revenue Laws Amendment applying for a tax directive on a pre
Act (“RLAA”) promulgated on 8 13 September 2007 divorce which is
January 2008, addressed the issue claimed on or after 1 March 2009 it
of the payment of tax and provided should be applied for in the name
for the tax to be paid on the non- of the non-member spouse and a nil
member spouse’s portion as and tax directive will be issued. However
when it became due and payable this exemption is restricted to only
to the non-member spouse. The pre 13 September 2007 divorce
liability for the payment of tax still orders, where the non-member
remained that of the member. spouse makes an election on or
after 1 March 2009.
The Financial Services Laws
General Amendment Act of 2008,
effective on 1 November 2008, then
introduced the clean break principle
retrospectively. This meant that
all enforceable divorce orders,
irrespective of when the order was
granted, could be paid immediately
to the non-member spouse.
The Taxation Laws Amendment Act,
2009 (“the Act”) was promulgated
on 30 September 2009. In terms of
the Act, all pre 13 September 2007
divorce awards which accrue after
1 March 2009, are taxable in the
hands of the non-member spouse.
The effective date of this provision
of the Act was set down as 1
March 2009. This meant that on
all pre 13 September 2007 divorce
awards which were claimed after
1 March 2009, administrators were
11 12> ADVICE
Basic Guide to Claim
Unemployment Benefits
Claiming Follow all the instructions of the
staff at the labour centre. Staff
When must I claim? at the labour centre may ask
unemployed workers to go for
Workers must claim within six training or advice or to visit the
months after they stopped working. labour centre at certain times.
How long can I claim for? Workers should do what they ask,
Workers can claim from the day or they may not be able to claim.
they stopped working until their
benefits are used up or they start Who can claim?
working again
You cannot claim if you get –
How do I claim? • benefits from the Compensation
Fund;
Workers must fill in the application • benefits from an unemployment
forms and, together with other fund under the Labour Relations
required documents, hand it in at a Act;
labour centre. • or if they –
• are suspended from claiming
Get the documents ready because of fraud;
Before workers can claim, they must • quit their job;
get the following documents ready: • do not report at set dates and
Workers who become unemployed • 13-digit bar-coded ID or times; or
have the right to claim from the passport - 3 certified copies of • refuse training and advice.
UIF. Workers must apply and will be ID;
paid at the labour centre of their • Form U1-2.1 Application for Workers can claim if their –
choice. Unemployment Benefits; • employers are bankrupt;
• Form UI-2.8 for banking details – • contracts are ended; or if they
signed and stamped by the • are fired
Application
Bank;
• Form UI-19 to show that you When the UIF May Refuse to Pay
The Unemployment Insurance
are no longer working for your The UIF may stop paying you
Act and Unmployment Insurance
employer -Peoplelink; benefits if you refuse to:
Contributions Act apply to all
• Copy of last payslip; and • accept a job;
employers and workers, but not to -
• Proof of registration as a work- • go for training; or
• workers working less than 24
seeker. • go for advice.
hours a month for an employer;
• learners;
Go to the nearest labour centre
• public servants;
Unemployed workers must go to the
• foreigners working on contract;
nearest labour centre themselves
• workers who get a monthly
and hand in the documents. Staff
State (old age) pension; or
at the labour centre will assist them
• workers who only earn
with all the processes and give them
commission.
more information.Pension Queries
Physical Address
The Unilever Pensions Team
15 Nollsworth Crescent
Nollsworth Park
La Lucia Ridge Office Estate
La Lucia
4051
Postal Address
PO Box 1029
Durban
4000
Other Pension Team Members’ Contact Details
Gordon Archibald 031 570 2716 Gordon.Archibald@unilever.com
Adesh Balmakhun 031 570 2898 Adesh.Balmakhun@unilever.com
Karen Waldburger 031 570 2834 Karen.Waldburger@unilever.com
Lydia Gibson 031 570 2845 Lydia.Gibson@unilever.com
Karen Havemann 031 570 2718 Karen.Havemann@unilever.com
Shehnaaz Mall 031 570 2835 Shehnaaz.Mall@unilever.com
Fund Communication:
Internal - Unilever Portal - http://inside.unilever.com/services/SA/CPR/Pages/Pension.aspx
External – Alexander Forbes - https://www.alexanderforbesonline.co.za/afocms/site/public
Pension Survey
Enter and win!
Complete our online survey
and stand the chance to win a
R1000 Woolworths gift voucher.
Click this link:
http://inside.unilever.com/region/AAC/SouthAf
rica/ Pages/240611PensionFundSurvey.aspx
13 14> CONTACTS AND FUN STUFF
Fun Stuff
Sudoku
How to play Sudoku:
Complete the grid so that every row, every column and every 3x3 box is filled with the numbers 1 to 9.
That’s all there is to it! No mathematics is involved. You solve the puzzle with reasoning and logic.
4 1 4 2 1
1 5 4 7 2 4 9
6 7 2 8 3 1 7
3 9 3 1 7 5
5 9 1 6 3 3 5
Intermediate
2 8 5 4 7 4
1 9 6 9 8 6
Tough
8 7 5 1 7 9 6
5 8 7 6 8
Quiz
Use the Unilever.co.za website to find answers to our quiz and learn a thing or two
about our business:
1. When was Unilever South Africa established?
2. What is the strap line for the new Axe Excite?
3. How many brands does Unilever South Africa manufacture?
4. Name a recent award we received for recruitment?
5. What is our current sustainability plan called?
6. By when do we want our product environmental footprint to be halved?
7. Unilever is proud of it’s innovation and works with many professionals and
academics around the world to develop new products. In a recent study, what did
scientists from the University of Gothenburg in Sweden discover?
A special class of nerves in the skin which respond to pleasant touch 7.
Answers
2020 6.
The Unilever Sustainable Living Plan 5.
Best Employers Award 2010/2011 4.
30 3.
Even Goddesses will fall 2.
1891 1.Design and Layout Unilever South Africa Blue Juice Design 13-15 Nollsworth Crescent Tel: 031 573 1780 La Lucia 4051, Kwa-Zulu E-mail: sandy@bluejuicedesign.com Natal,South Africa www.bluejuicedesign.com P O Box 1091, Durban, 4000
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