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small, medium & micro
enterprises
25 October 2007
small, medium & micro enterprises
Agenda
• Lets talk about 2010!
• Do SME’s have unique needs?
• What are the benefits for employers to provide employee
benefits?
fundsatwork
Agenda
• Lets talk about 2010!
• Do SME’s have unique needs?
• What are the benefits for employers to provide employee
benefits?
fundsatwork
small, medium & micro enterprises
Lets talk about 2010!
• Trevor Manual said: “Plan and prepare for the long term.”
• “…too many people … cash in their benefits when they change jobs.”
• The number of people savings in SA has reduced from 9% to 4% in
the last 10 years
poverty / social security comfort / prosperity
Lets talk about 2010!
Retirement fund reform: broad principles
move from voluntary to compulsory
enforced savings and preservation
amalgamation of state benefits
The existing retirement savings industry serves a limited section of the population. Social security systems are effective
worldwide at redistributing wealth
Lets talk about 2010!
fundsatwork
Compulsory occupational pension
• Unemployment• Retirement• Death & disability
Threshold 1 (tax encouragement) earnings ≤ ?
Social assistance
grant
Private pension
provision
NationalSocial
SecurityScheme
Voluntary occupational pension fund or private pension fund
Threshold 2 (tax encouragement) earnings ≤ ?
Above Threshold 2 (limited tax encouragement)
Above Threshold 3 (no tax encouragement)
Retain social assistance grant (old age pension) but increase or remove the means test threshold
Lets talk about 2010!
poverty / social security comfort / prosperity
Lets talk about 2010!
fundsatwork
• Employers are going to have to contribute to the fund for their
employees
• Employees are going to also have to contribute, possibly reducing their
take-home pay
• Consumers are going to have to become more educated and more
interactive with their retirement, death and disability benefits
How does this impact on you and your employees?
Lets talk about 2010!
Agenda
• Lets talk about 2010!
• Do SME’s have unique needs?
• What are the benefits for employers to provide employee
benefits?
fundsatwork
small, medium & micro enterprises
fundsatwork
• Entrepreneurial culture
• Creating a sustainable business is their main focus
• Expertise in a specific area of their business, therefore do need to be bound
down with all the legislation and pension fund issues
• Key staff often pose a high risk to the business if they leave
• They do not have the same bargaining power as a large corporate
• Often resources are already stretched to just cope with basic day to day HR
admin
fundsatwork
Do SME’s have unique needs?
fundsatwork
Are there products for SME’s?
• They are called Umbrella funds
• Multiple employers enjoy the benefits as if they were a large corporate
• Pricing becomes competitive
fundsatwork
Do SME’s have unique needs?
fundsatwork
Agenda
• Lets talk about 2010!
• Do SME’s have unique needs?
• What are the benefits for employers to provide employee
benefits?
fundsatwork
small, medium & micro enterprises
fundsatwork
Advantages for you as an employer
Benefits for providing employee benefits
• Allows for the stability and contentment of the employees, which results in
lower staff turnover and the reduction of recruitment and training costs
• Helps to attract better calibre of staff
• Social responsibility
• Employer contributions are tax deductible
fundsatwork
Advantages for your employees
Benefits for providing employee benefits
• Provides security and provides a base for all their retirement, life & disability
plans
• Ensures that employees are adequately covered and can provide for
themselves and their dependants in the event of death, disability and
retirement.
• Employee contributions to a pension fund are tax deductible.
• Life and disability cover while employed may be obtained at a lower cost
than individual cover.
fundsatwork
Get off the starting blocks!
• Competent financial advisers are there to guide you through the process
• Start now so that your employees can get used to saving over a period of
time
small, medium & micro enterprises
fundsatwork
Questions?
Thank you
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