small medium micro enterprises 25 October 2007 small

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

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

Lets talk about 2010! poverty / social security comfort / prosperity

Lets talk about 2010! Retirement fund reform: broad principles The existing retirement savings industry serves a limited section of the population. Social security systems are effective worldwide at redistributing wealth § move from voluntary to compulsory § enforced savings and preservation § amalgamation of state benefits

Lets talk about 2010! Above Threshold 3 (no tax encouragement) Private pension provision Above Threshold 2 (limited tax encouragement) Voluntary occupational pension fund or private pension fund Threshold 2 (tax encouragement) earnings ≤ ? Compulsory occupational pension National Social Security Scheme Social assistance grant Threshold 1 (tax encouragement) earnings ≤ ? • Unemployment • Retirement • Death & disability Retain social assistance grant (old age pension) but increase or remove the means test threshold fundsatwork

Lets talk about 2010! poverty / social security comfort / prosperity

Lets talk about 2010! How does this impact on you and your employees? • 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 fundsatwork

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

Do SME’s have unique needs? • 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? 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

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

Benefits for providing employee benefits Advantages for you as an employer • 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

Benefits for providing employee benefits Advantages for your employees • 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

small, medium & micro enterprises 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 fundsatwork

Questions? Thank you fundsatwork