Annual Overview 2018

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Introduction 3

A reminder about your benefits 4

Exiting the fund?

Understand taxation to avoid regret 5

Preservation: don’t land up in a pickle! 6

The Steinhoff debacle – The Fund’s stance 7

Before you leave for your December break 8

ContentContact Us

ComplaintsIf you are not comfortable with the Administrator’s or the Principal Officer’s handling of your query, you may lodge a formal written complaint with the Board of Trustees. If the Board of Trustees is not able to resolve the issue to your satisfaction within thirty days upon receipt of your written complaint, you may direct your complaint to the Pension Funds Adjudicator.

However, please bear in mind that the Board of Trustees must act in line with the Rules of the Fund, and the Pension Funds Adjudicator cannot grant benefits that are not allowed in terms of the Rules of the Fund. Furthermore, the Adjudicator has the power to make you pay costs if you submit frivolous complaints against the Fund.

Contact details of the AdjudicatorTel: 087 942 2700 or 011 783 4134 Email: enquiries-jhb@pfa.org.za

Disclaimer

Whilst care has been taken in the compilation of this publication, the editors and publishers do not accept responsibility for any loss or damage that may be sustained as a result of reliance by any person on the information contained herein. No information contained herein constitutes an offer for sale, or recommendation, of any service or product and is also not financial or investment advice. No warranty is provided that the information is appropriate or suitable for any particular purpose, or that it is complete or accurate. In the case of any discrepancies the Rules of your Fund shall prevail.

Dedicated Help Desk - Pensioners And Members

Telephone: 0860 864 7273Email: info@unisarf.co.za

Principal Officer

Telephone: 012 429 2521/2747Email: info@unisarf.co.za

General Queries – Pensioners

Email: unisa.pension@aforbes.co.za

Administrators

Alexander ForbesPrivate Bag X21Brooklyn SquarePretoria0075

Telephone: 0860 100 333 Email: afonlinehelp@aforbes.co.zaWebsite: www.alexanderforbes.co.za

Did you know?

You can update your personal information online at http://www.unisarf.co.za/update-your-data so that we can always contact you when needed!

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Introduction

Dear Member/Pensioner

The economy – both locally and globally – has been anything but predictable over the last 12 months.

Globally, economic growth has been strong due to growth in China, India and the developed world. Unfortunately, this has not been the case for South Africa, which has recently fallen into a technical recession. Several economic challenges have actually seen the economy reduce in size during 2018.

As an emerging market, our economy should be growing by more than the real-world economic growth of about 4% per annum. In contrast, we have struggled to even reach growth of 2% a year over the last few years. In addition, structural issues in some state-owned enterprises and uncertain policies have weighed on investor sentiment and impacted the investment market.

Despite our investment performances over the past 24 months being below expectations, history teaches us that economic growth and investment returns come and go in cycles. Although the economy is struggling at this point, there is still hope for South Africa. President Ramaphosa has embarked on a ‘stimulus’ plan to get the economy back on track and has also started addressing troubled state-owned enterprises.

Through time and patience, the SA economy should see healthier investment returns. Therefore, we urge all of our 5 233 members and 593 pensioners to stay calm and allow the cycle to pass.

Please remember that, when preparing for the future, the assistance of a registered financial advisor is one of the true signs of being in control of your retirement planning. An advisor will help you to select the right savings and investment options and will also take into account other things (such as your children’s education) for which you need to plan.

Best wishes for the festive season.

Kind regardsJackie DuvenagePrincipal Officer

Latest Monthly Investment Returnshttp://www.unisarf.co.za/unisarf/fund-investments

Latest Financial Statements, Rules, Actuarial Valuationhttp://www.unisarf.co.za/unisarf/policies-and-rules

Click Here

Click Here

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A reminder about your BENEFITS

If you are a deferred pensioner:

Did you know?If your employment is terminated or you retire, and you do not submit a Withdrawal Form or Retirement Form, instructing the Fund’s Administrator to transfer or cash out your Fund Credit, you will automatically become a deferred pensioner of the Fund. Your money will remain invested where it is, unless you complete an Investment Choice Switch Form.

ImportantIf you become a deferred pensioner, it is VITAL that the Fund and Administrator have your correct contact details at all times.

All forms can be downloaded athttp://www.unisarf.co.za/unisarf/forms Click Here

Admin costs will be deducted on a monthly basis.

No further contributions will be made.

You will no longer be covered for death, disability and funeral benefits.

You will continue to earn investment returns.

You can withdraw or transfer your money at a later stage, when you are ready to do so or retire from age 55.

Contact your Principal Officer, Jackie Duvenage, for further assistance: duvenjs@unisa.ac.za

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Exiting the Fund? Understand taxation to avoid regret

Many people may think that cashing out their retirement funds to pay off debt is a good idea. But it often leads to an even worse situation by the time you are ready to retire. And, what’s more, you pay a large percentage in tax if you take cash when you exit the Fund!

Tax penalties at withdrawal

If you withdraw cash when changing jobs, only R25 000 will be taxed at 0%:

Taxable Income (R) Rate of Tax (R)

0 – R25 000 0%

R25 001 – R660 000 18% of taxable income above R25 000

R660 001 – R990 000 R114 300 + 27% of taxable income above R660 000

> R990 001 R203 400 + 36% of taxable income above R990 000

“Catching up” is not as easy as you think

The later you start saving, the greater your contribution will need to be in order to maintain a reasonable living standard at retirement. Click here to find out more about compound interest – which you will also lose out on if you take some or all of your benefit in cash…

There is no changing your mind!

In terms of the South African tax legislation, once you have elected to receive a cash withdrawal benefit and a tax directive has been issued by SARS, the directive CANNOT BE CANCELLED! Cancellation will only be allowed if a genuine administrative error was made in the application process.

Please NoteYou will only receive R25 000 once before retirement without paying tax. Therefore, if you withdraw again from another fund, the amount already received will be taken into account.

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PRESERVATION Don’t land up in a pickle!When you hear the word ‘preserve’ you may well start thinking about delicious jams and spicy pickled onions. But when it comes to your retirement, preservation means something slightly different.

When we talk about preserving for your retirement, we mean NEVER EVER touching your retirement savings… UNTIL you retire!

As a whole, our society spends far too much on credit, often on things we don’t really need. Many of us have an unhealthy relationship with money, and the wrong attitude towards debt. Added to this, the increasing cost of living has left the majority of South Africans financially vulnerable.

Many people underestimate how long they will live after they retire. As medical research improves, so does your life expectancy. If you live longer, will that be a great bonus filled with joy and love, or a time of financial hardship and having to rely on those you love?

The moral of the story is: Leave your savings untouched, to grow in strength, like a bottle of pickles. Because the moment you unseal that bottle of delicious preserves, you know you won’t be able to resist eating more than you should!

can expect to stay financially independent when they retire. Often, this is because of poor decisions that were made many years before.

10 %Less than

of South Africans

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THE STEINHOFF DEBACLE The Fund’s stanceWhat’s this all about?

Steinhoff International is a South African international retail holding company. It used to be one of the largest companies listed on the Johannesburg Stock exchange. The company’s primary listing is in Frankfurt, Germany; and it is headquartered in the Netherlands.

On 6 December 2017, it was announced that Steinhoff’s CEO, Markus Jooste, had resigned and that the company’s auditors would be investigating accounting irregularities at the business. Furthermore, German authorities were also investigating charges of accounting fraud. Simply put, it seems that the company’s profits have been overstated, and its losses understated, for a number of years.

How has this affected the Fund?

Although many retirement funds are likely to have invested a portion of their assets in Steinhoff, the GOOD NEWS is that all retirement funds are legally obliged to follow certain rules for how much exposure they can have to any one company, in line with Regulation 28 of the Pension Funds Act.

The fall in the Steinhoff share prices detracted from the performance of the various channels as set out below:

• Inflation Target Portfolio*: 2.25%• Stable Portfolio: 0.87%• Income Protection Portfolio: no impact

*If you are invested according to your age, then the younger you are, the more likely you are to have exposure to Steinhoff. This is because you would have a larger portion of your assets invested in shares. Nevertheless, the impact would still be very small.

There is a valuable lesson to be learned here: it is so important to invest in a diverse range of shares as well as asset classes. As the old saying goes, NEVER put all your eggs in one basket.

What should you do now?

As is often the case, the best option right now is to keep calm and carry on. Your Fund’s investments are diversified across various sectors, as well as multiple asset classes, both locally and internationally. Furthermore, your Fund’s investment managers are monitoring the situation, and they will act in your best interest.

Closing statement

Allow the Trustees of UNISARF to manage the situation in the appropriate manner together with the Investment Consultants of the Fund. To reiterate, your Fund’s investments are diversified across various sectors, as well as multiple asset classes, both locally and internationally; to achieve optimal returns and provide protection in the event of just such an event.

There are still many unanswered questions around Steinhoff, and it will take time to find the truth and for the facts to be made public in the audit report that is currently being prepared by PricewaterhouseCoopers. UNISARF and its investment managers have joined the class action lawsuit against Steinhoff, but such cases take years to resolve and no outcome can be confidently predicted at this stage.

• Shari’ah Portfolio: 0.81%• Pensioner Portfolio: 0.8%

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Before you leave FOR YOUR DECEMBER BREAK…

When last did your review your beneficiaries?

One of our greatest concerns about leaving this world is often not so much the leaving part, but rather for our loved ones, whom we are leaving behind.

If you die before your normal retirement date, your death benefit, plus twice your annual pensionable salary, will become payable to your dependants and/or nominees. If you have a qualifying life partner (spouse), a pension of 35% of your pensionable salary is paid to him/her. Otherwise, this is shared between your children and will be paid until they reach age 18 (or age 24 for full-time students).

!ImportantThe Board relies on your Nomination of Beneficiary form to guide them when allocating your fund credit. Unless your nominations are up to date, this payment could be significantly delayed, resulting in financial and emotional suffering for those you hold most dear.

Have you revised your Beneficiary Nomination Form lately?

You can find out more, send an email query to the Principal Officer, and/or update your form by visiting the Fund’s website:http://www.unisarf.co.za/unisarf/forms

Submit your completed form to the Employer (Department of Human Resources) for safekeeping in your personnel file.

www.unisarf.co.za