Frequently Asked Questions

Membership of the UCTRF

1. Do I have to join the UCTRF? - Click here for more

DPA

2. When can I change my DPA?

Staff may increase or decrease in their DPA which will result in a bigger or smaller contribution to the UCTRF. There will be an associated increase or decrease in the Group Life Assurance cover, disability cover and the fringe benefit tax on the Separate Group Life Assurance cover. Please note, however, that any increase in your contribution to the UCTRF will not result in an increase in your guaranteed CoE, but will form part of your guaranteed CoE

The DPA amounts are optional between 50% and 100% subject to the following conditions:

(i) Staff who increase their DPA by more than 10% may be required to complete a health questionnaire for the insurer who reserves the right to limit the cover based on their underwriters assessment.

(ii) Once a member has changed their DPA they can only change it again at a future annual CoE review.

(iii) Staff who decrease their DPA to less than the recommended amount must schedule an interview with their HR Practitioners who will take them through the consequences of their decision and ask them to sign an acknowledgment of these consequences. 

3. What is my % DPA?

You can view your DPA on your payslip under 'other information'. Alternatively, please contact your HR Practitioner, who will be able to assist you.

Contributions

4. Can I contribute more/less towards my retirement funding? - Click here for more

5. How much do I contribute towards the UCTRF? - Click here for more

Investments

6. Where is my benefit invested? - Click here for more 


The UCTRF allows member investment choice, which means that you choose where to invest your Accumulated Retirement Savings

If you are under 60 and you do not make any choice when you join the UCTRF, then your Accumulated Retirement Savings will be invested in accordance with the Life Stage Model.

If you turn 60 or older in the year in which you join the UCTRF and you do not make any choice, your Accumulated Retirement Savings will be invested 100% in the Income Fund. This is a conservative approach and you should consider whether this meets your needs. 

You may elect a different option at any time. Your investment portfolio is indicated on your benefit statement which you can view on the Retirement Fund Web.


7. Where should I invest my benefit? - Click here for more

8. How often can I change my investment choice?

You can switch your investment portfolio/s at any time, but you should be aware that switching frequently may work against you. It is better to select the option that is right for you and your long-term needs, and only switch if and when your needs change. In addition, if you switch more than once in the period between 1 July and 30 June each year, you will pay an administration fee for each additional switch. Click here for more information on how to make an investment choice.  The most common investment mistakes (one of which is trying to time the market - switching your investments when markets drop) can be viewed here.

9. Which Fund do you think I should invest in? - Click here for more

10. What is the Life Stage Model and why do we have such a model? - Click here for more

Withdrawal Benefits

11. How much money will I receive when I resign? - Click here for more

12. On how much will I be taxed at resignation? - Click here for more

13. How soon after resignation will I receive my benefit?

You will receive your monies from the UCTRF within 15 business days of receipt of all necessary information, provided that all contributions have been received and are up to date and receipted and that UCTRF's Administrator receives a tax directive from SARS within 2 business days of making such an application. 
This service level shall be extended for the same period that these requirements are not met.

14. Will I receive interest on my benefit while my payment is being processed?

Yes. Your money is invested in a money market account until the tax directive is applied for and from this date bank interest is added until date of payment to you.

Retirement Benefits

15. How much money will I receive when I retire? 

You will receive your Accumulated Retirement Savings in the UCTRF. If you want an indication of how much your benefit will be worth when you retire, please make use of the Retirement Calculator.


16. How much will I be paid as a monthly pension?

The UCTRF is a Provident Fund and is designed to provide a pension (in the form of an annuity) at retirement. However, full commutation of this benefit is allowed, which means that you can choose to receive your retirement in any of the following ways:

(a)     As a monthly pension only;
(b)     As a monthly pension and a lump sum; or
(c)     As a lump sum, in a once-off payment in final settlement of your benefit.

If you elect option (a) as a monthly pension only, you must choose either a living annuity from the UCTRF or purchase a life or living annuity from a registered Insurer.  When choosing your pension, you should arrange a type of pension and amount to suit your particular needs.  This is why it is advisable to see a Financial Advisor when planning your retirement.

If you elect option (c) as a lump sum, in a once-off payment in final settlement of your benefit, then the UCTRF’s obligation to you ends the day you receive your Accumulated Retirement Savings as a lump sum. 

It is important to note that the UCTRF’s obligation to you also ends should you choose an annuity from an insurance company, rather than a living annuity from the UCTRF.

If you elect option (b) as a monthly pension and a lump sum, the same conditions apply as stipulated above.

What is a Life Annuity?

It is a monthly pension, which is guaranteed for your life.  The Insurer calculates the pension you will receive every month, and this depends on the amount of your Accumulated Retirement Savings and the type of pension you choose.  The following factors play a role:

  • Whether you have elected to take a lump sum, or not;
  • Whether you have elected to include a guaranteed period, or not;
    • This means the pension will continue to pay out (to whomever you elect i.e. your spouse and/or your dependants) until the terms ends, even if you die during this period.  For e.g. if you choose a 5 year guaranteed period, your pension is guaranteed to pay out from your retirement date until the end of the 5 years, even if you die in the first year.
  • Whether you have elected that a spouse’s or dependant’s pension must be paid after your death;
    • This means the pension will continue to pay out (for life) to your spouse or dependant after your death, even after the guaranteed period has expired.  However, should your spouse also die after the guaranteed period has expired and you did not choose to include a dependant pension, the monthly pension will no longer pay out.
  • The Insurer guarantees the pension, so it provides you with security – the only risk is if the Insurer becomes insolvent.

For more information regarding life annuities and the options available please refer to the UCTRF Retirement Options Booklet.

What is a Living Annuity?

When you leave your Accumulated Retirement Savings with the UCTRF (or an Insurer providing a similar product), it is then treated as a savings account and will grow with investment returns. 

SARS stipulates that you must take between 2.5% and 17.5% of the total value of your account annually as a pension, but that the annuity must at all times produce a life annuity.  This may mean that the maximum you may take is likely to be lower than the normal range of 17.5%.  You can adjust your pension annually within these constraints.

The pension can be paid to you monthly, quarterly, biannually or annually (if you take a monthly pension, the monthly amount is fixed for the coming year based on the amount invested at the beginning of the year and your chosen percentage).

For more information regarding living annuities and the options available please refer to the UCTRF Retirement Options Booklet.


17. On retirement, how much can I take in cash?

You will be able to take your entire benefit in cash. This is not a recommended option due to the tax implications.  

18. How much will I be taxed at retirement? - Click here for more

No tax is payable on your Retirement Benefit if you choose to use your full benefit to purchase your pension. There will be tax payable on the pension payment that you receive, based on individual income tax rates, this can be calculated by your Financial Advisor at the time of your retirement. 

19. How soon after retirement will I receive my benefit?

You will receive your monies from the UCTRF within 15 business days of receipt of all necessary information, provided that all contributions have been received and are up to date and receipted and that UCTRF's Administrator receives a tax directive from SARS within 2 business days of making such an application. However, any information that is required and/or request and not submitted or is outstanding, will delay the process. 

20. Will I receive interest on my benefit while my payment is being processed?

Your money is invested in a money market account until the tax directive is applied for and from this date bank interest is added until date of payment to you. 

21. Can I decide where to purchase my Living Annuity?

Yes, please refer to the UCTRF Retirement Options Booklet for more information on the options available to you.

22. Can I decide where to purchase my living annuity? 

Yes, the UCTRF's rules allow that a Member or a Beneficiary may purchase a pension in the form of a Living Annuity from the UCTRF, a Life Annuity from an Insurer, or A Living Annuity from an Insurer, or a combination of a Life and Living Annuity from an Insurer. 

23. Can I change Insurers at a later date if I took the Living Annuity with the UCTRF in the first instance?

Yes, the UCTRF's rules allow that a person in receipt of a Living Annuity may instruct the UCTRF to apply the Living Annuity balance to purchase a Life Annuity or Living Annuity from an Insurer. However, if you are invested in the Smoothed Bonus Portfolio, an MVA may apply in certain conditions.

Death Benefits

24. What are my death benefits? - Click here for more

25. Where can I find the Nomination of Beneficiaries Form? - Click here for the forms page

26. When/how often should I update my Nomination of Beneficiaries Form? 

You should review your Nomination of Beneficiaries Form at least annually or in the event of a life such as birth, death or separation/divorce.

27. Where can I send my forms once completed?

Please return your forms to the person specified on the form you have completed.


Our Contact Details

 



Enquiries

021 650 2934

Please send all comments or questions to:
UCTRF-enquiries@uct.ac.za

Fund website:
www.uctrf.co.za