Umbrella Funds

What are the Ecsponent Umbrella Funds?

The Ecsponent Umbrella Pension Fund and the Ecsponent Umbrella Provident Fund are individual legal entities that allow several participating employers to join. By pooling funds, employers and their employees enjoy cost savings generated from economies of scale, which ultimately contribute to improved returns. The funds are governed by a board of trustees who is responsible for governance and ensuring that the funds comply with relevant legislation.

Who are the Umbrella Funds administrators?

D and D the Cycle (Pty) Ltd (D and D) are the appointed administrators of the funds. D and D is an approved section 13B administrator and an authorised Financial Services Provider.

How are the funds managed?

The trustees, who have a responsibility to protect members’ interests, manage and run the funds. Their responsibilities include appointing the administrators, drafting the rules of operation, managing the funds in accordance with the Pensions Fund Act, deciding the range of investment options and determining the members’ dependents.

You have the right to see the funds’ rules and you can request them directly from Ecsponent.

Why should I choose to join the Ecsponent Umbrella Funds?

  • The funds are tax-efficient, flexible and cost-effective with an easy-to-understand fee structure
  • Each participating employer can set its own special rules that apply only to its employees
  • The funds will give employees access to a range of investment options with exposure to all the relevant asset classes to diversify their retirement benefits
  • Employees can select from a range of funds
  • Participating employer administration is effortless and secure, using a fully integrated system that provides updated information and submits real-time transactions
  • The funds focus on educating the members and the participating employer to enhance financial knowledge
  • Members have online access to their real-time fund values
  • The participating employer portal provides detailed and updated reports

How do the funds work?

Each participating employer must select a contribution percentage, that will be paid by the employer and member respectively.
These rates may differ for specific groups of employees, or members can choose their own contribution percentages.

The member’s fund value is paid out on retirement, death, retrenchment or resignation.

What happens if an employee dies?

If a member dies, while employed, their dependants will receive their fund value. The law states that the trustees of the fund have an obligation to determine who the member’s legal dependants are and divide the death benefit payment fairly between dependants and nominees.

What can employees do after they have left your employment?

Employees who have resigned, have been retrenched or dismissed have the option to preserve their benefit by transferring into the Ecsponent Preservation Pension Fund, Ecsponent Preservation Provident Fund or Ecsponent Retirement Annuity Fund seamlessly without any additional costs and without incurring an additional tax liability. They can also transfer to another preservation fund. They may also take the full benefit in cash, less any tax-deductible amount. If they choose to transfer their benefit to an Ecsponent fund, they are able to keep their investment in the same investment options.

What about employees who retire from the fund?

Members belonging to the Umbrella Pension Fund can take up to one third of their fund value in cash at retirement. Tax may be payable on the cash portion taken. The remaining balance must be used to purchase an annuity that will pay an income in retirement.

Members belonging to the Provident Fund can take up to 100% of their fund value in cash at retirement. Members can also use part or all of their fund value to purchase an annuity that will pay an income in retirement.

The funds offer seamless transfers for members who retire. Members are able to transfer into the Ecsponent Living Annuity policy effortlessly and retain the same investment options, without any additional costs.

How will the fund value to each member be calculated?

The fund value due to each member will comprise of all contributions made to the fund after deductions and fees, plus the investment returns earned on the contributions, in addition to any amount an employee may have transferred into the fund from a previous employer.

What are the investment options available to members?

The Trustees approve a range of Regulation 28 compliant investment options suitable for members. Updated monthly fund fact sheets for the investment options are available for download.

What are my responsibilities as an employer?

As an employer you have responsibilities around the administration of the Fund and ongoing financial education of employees. Ecsponent provides important information for employers and sends communication to employers that they need to distribute to Fund members.

What is it going to cost your employees?

Administration fees

If the Participating Employer has fewer than thirty (30) employees and the asset value is less than R3.5m, a fixed fee of R45 per member per month is payable. If the membership increases to greater than thirty (30) and the asset value exceeds R3.5m the sliding scale below will apply.

Illustrative administration fee excluding VAT (note that the scale below is indicative)

Asset Value Less than R10m Between R10m and R20m Greater than R20m
Administration fee 0.45% 0.35% 0.25%

Please refer to the Umbrella Funds Guide for a full breakdown of all applicable costs.

Refer to the fund fact sheets for breakdown of costs related to the Investment Options.

Disclosures

 

The Ecsponent Umbrella Pension Fund and the Ecsponent Umbrella Provident Fund are registered with the Financial Sector Conduct Authority (“FSCA”), and approved by the South African Revenue Services (“SARS”). The Funds are established by the Sponsor, Ecsponent Financial Services (Pty) Ltd (registration no: 2006/012668/07). The Funds are administered by an administrator chosen by the Funds’ Trustees from time to time. The current benefit administrator of the Funds is D and D The Cycle (Pty) Ltd (“The Cycle”), (registration no: 2013/157477/07). The Cycle is an approved fund administrator and an authorised Financial Services Provider. The current investment options available to the members of the Funds are approved external funds, Personalised Share Portfolios (PSP) and selected pooled investments.

 

This guide has been compiled to provide factual information on the product offered and does not constitute advice.

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