1. University of Johannesburg Pension Fund
University of Johannesburg Defined Benefit Pension Fund
What you need to know about your retirement fund
Presenters: Suzette Müller and Neil Myerson

2. Agenda 1. Introduction 2. Contributions 3. Retirement benefits
4. Withdrawal benefits
5. Death benefits
6. Disability benefit
7. Benefit statements
8. Intranet
9. AF Online and call centre
10. Investment choices
11. Investment portfolios
12. Risk profile
13. Life Stage Model
14. Switching

3. Employer and member contributions depending on membership category
Introduction – University of Johannesburg Pension Fund & University of Johannesburg Defined Benefit Pension Fund
Pension fund
Tax deduction
1/3 cash at retirement
Employer and member contributions depending on membership category
Normal retirement age – 65
Summary of Benefits / Benefit statement

4. UJ Defined Benefit Pension Fund
Introduction
UJ Pension Fund
UJ Defined Benefit Pension Fund
Structure
Defined contribution
Defined benefit
with Defined contribution categories (Annex D & E)
Status
Active fund
Closed to new members
Investments
Member investment choice – members carry investment risk
Trustee portfolio and member investment choice (Annex D & E)

5. Retirement benefit promise
Contributions
Member contribution: 7.5%
Investment
Return
Employer contribution:
Category 1: 13.0% -Category 2: 14.8%
Category 3: 16.5%
Member contribution: 7.5%
Investment
Return
Employer contribution: ??
Equitable
share of Fund: ??
Retirement benefit promise

6. Retirement Benefits Normal retirement age Early retirement
End of the calendar year in which the member reaches age 65
Early retirement
From age 55 with Employer’s consent
Late retirement
No later than age 70 with Employer’s consent
Consent has to be renewed annually

7. Retirement Benefit – UJ Pension Fund
Purchase annuity from registered insurer
Up to one third in cash
Talk to your financial advisor

8. Retirement benefit – UJ Defined Benefit Pension Fund
Normal Retirement Age / Late Retirement
Lump sum to purchase annuity from registered insurer or pension from Fund
Benefit promise as calculated by actuary
Years of service
Salary
Talk to your financial advisor

9. Retirement benefit – UJ Defined Benefit Pension Fund
Early Retirement
Lump sum to purchase annuity from registered insurer or pension from Fund
Benefit promise as calculated by actuary
Years of service
Salary
Reduction
Talk to your financial advisor

10. Withdrawal benefit Reasons for withdrawal Withdrawal benefit
Termination of service
Withdrawal benefit
UJ Pension Fund: Equitable share of Fund
UJ Defined Benefit Pension Fund: Lump sum based on contributions, subject to benefit promise
Deductions per Section 37D of the Pension Funds Act
Preserve the benefit if possible
Talk to your financial advisor

11. Death benefit – UJ Pension Fund
Main and Annexure B members
Equitable share; plus
4x annual pensionable salary
Annexure A members
Lump sum of 2x annual pensionable salary; plus
A qualifying partner’s pension and a qualifying child’s pension

12. Death benefit – UJ Defined Benefit Pension Fund
Pre-retirement
Lump sum of 2x annual pensionable salary; plus
An annual qualifying partner’s pension of 40% of pensionable salary; plus
A qualifying child’s pension of 10% of pensionable salary per qualifying child to a maximum of 30%
No qualifying partner, the child’s pension doubles

13. Death benefit – UJ Defined Benefit Pension Fund
Post-retirement if fund pensioner
5 year guarantee for qualifying partner
Full pension paid to partner
No qualifying partner – lump sum paid to the estate
After 5 years
Qualifying partner annual pension 50% of pensioner’s pension at date of death

14. Distribution of death benefits
Section 37C of the Pension Funds Act
Thorough investigation
Consider legal and financial dependants
Nomination of Beneficiaries form is a guideline

15. Disability benefit
Payable as per the Rules of the University of Johannesburg Disability Reserve Fund
82.5% of the member’s monthly salary
6 month waiting period
Subject to approval of claim by insurer
Payable until earliest of recovery, re-employment, normal retirement age or death before retirement

16. Benefit statements Issued annually Contains following information
Benefit category
Withdrawal benefit
Death benefits
Disability benefit

17. Intranet Useful information available on intranet
Rules of the Fund
Benefit summaries
Member booklets
Trustee Reports
Nomination of beneficiary forms
Forms for additional voluntary contributions
Performance history
Red button on left of opening page
“Pension and Provident Funds”

18. AF Online and call centre
Call centre number
AF Online
Updated values – only defined contribution members
Various financial planning tools and calculators

19. Introduction – Investment Choices
Legislative limitations
New Regulation 28
Limitations with regards to foreign investments
Principle limitations
Trustees are required to act in the best interests of the members

20. Introduction – Investment Choices
Members have different needs
Solution: Individual investment choices
Members make own choices within a given framework of portfolios
Trustees are still responsible for the choice of portfolios offered to the members

21. Investment Choice Process 2013
Employees who joined the UJ Pension Fund
Annexure D, E and F members of the UJ DB Pension Fund

22. Current Portfolios Wealth Creation Wealth Preservation
Capital Protection (implicit capital preservation)
Guarantee Portfolio
Money Market Portfolio
Shari’ah compliant portfolio
Life Stage Model

23. Available Portfolios Member Choice Wealth Creation Wealth Preservation
Capital Protection
Guarantee
Money Market
Shari’ah Compliant
Life Stage

24. Market Linked Portfolios
Returns generated directly from the market
No guarantee of capital protection
Should provide better returns than Guarantee portfolio
Ideal for members with long-term investment horizon

25. Wealth Creation Balanced portfolio with flexible asset allocation.
Aims to achieve inflation + 7 % in the long-term.
Potentially high volatility. Equity exposure may range from 45% to 75%
Normally members more than 10 years from retirement

26. Wealth Preservation
Positive return portfolios with some exposure to higher risk balanced portfolios
Aims to achieve inflation + 5 % in the medium to long-term
Aims to preserve wealth in real terms while maintaining exposure to growth assets
Lower equity exposure and risk than Wealth Creation
Normally members with five to 10 years from retirement

27. Capital Protection
Aims to minimize the risk of negative returns over the short-term
100% of capital and growth declared is guaranteed on retirement, withdrawal, retrenchment, death and disability
A positive return portfolio with no explicit guarantees provided
Aims to achieve inflation + 3 % over 3 years
Market linked portfolios (excl Money Market) should outperform this portfolio over long term
Normally members with less than five years to retirement

28. Money Market 100% money market instruments Lowest risk profile
Suitable for investors who have a low appetite for volatility risk, investors with short-term investment horizons
Normally members within one year from retirement

29. Guarantee Portfolio
Smooth bonus portfolio (underlying assets diversified exposure to all asset classes)
Objective to achieve inflation + 3.5% over longer term.
Fixed guarantee on capital, contributions and declared positive investment returns (on benefit payments and other specified events)
Returns declared monthly in advance, once declared cannot be taken away
Switch at book value (10% of assets limit)
Suitable for risk averse investors (close to retirement/avoid volatility of full market-linked investments)

30. Shari’ah Portfolio
A Shari’ah Compliant Portfolio that is also compliant with Regulation 28 of the Pension Funds act
Balanced Fund with exposure to equity and cash
Aims to give an investment return comparable to a traditional balanced portfolio
Equity exposure may be as high as 65% of the portfolio

31. Risk Return Profile Risk Expected Return Wealth Creation
Wealth Preservation
Shari’ah Compliant
Capital Protection
Risk
Guarantee
Money Market
Expected Return

32. Investment Returns to 31 December 2012
1 year
3 years
5 years
UJ Wealth Creation
18.7%
14.2%
11.5%
CPI+7%
12.6%
12.1%
13.3%
UJ Wealth Preservation
14.8%
11.3%
10.9%
CPI + 5%
10.6%
10.1%
UJ Shari’ah
6.2%
6.8%
UJ Capital Guarantee
8.8%
7.9%
CPI + 3.5%
9.1%
8.6%
9.8%
UJ Capital Protection
9.3%
10.3%
CPI+3%
8.1%
UJ Money Market
5.4%
8.5%
CPI + 1.5%
7.1%
6.6%
7.8%
 TRUSTEE PORFOLIO
1 year
3 years
5 years
Trustee
19.3%
14.6%
11.2%
CPI + 5%
10.6%
10.1%
11.3%

33. Investment Returns to 31 March 2013
1 year
3 years
5 years
UJ Wealth Creation
20.3%
14.2%
12.1%
CPI+7%
12.9%
12.3%
13.2%
UJ Wealth Preservation
15.2%
10.6%
9.4%
CPI + 5%
10.9%
10.3%
11.2%
UJ Shari’ah
8.2%
7.6%
6.5%
UJ Capital Guarantee
12.5%
9.5%
8.1%
CPI + 3.5%
8.8%
9.7%
UJ Capital Protection
11.7%
8.6%
9.8%
CPI+3%
8.9%
8.3%
9.2%
UJ Money Market
5.1%
5.9%
7.8%
CPI + 1.5%
7.4%
6.8%
7.7%
 TRUSTEE PORFOLIO
1 year
3 years
5 years
Trustee
22.0%
15.7%
12.8%
CPI + 5%
10.9%
10.3%
11.2%

34. Investment Returns to 31 March 2013
1 year
3 years
5 years
UJ Wealth Creation
19.6%
14.0%
12.0%
CPI+7%
12.9%
12.3%
13.2%
UJ Wealth Preservation
14.7%
10.8%
9.5%
CPI + 5%
10.9%
10.3%
11.2%
UJ Shari’ah
7.5%
7.4%
6.3%
UJ Capital Guarantee
12.5%
8.1%
CPI + 3.5%
9.4%
8.8%
9.7%
UJ Capital Protection
11.3%
8.6%
9.8%
CPI+3%
8.9%
8.3%
9.2%
UJ Money Market
5.1%
5.7%
7.7%
CPI + 1.5%
6.8%
 TRUSTEE PORFOLIO
1 year
3 years
5 years
Trustee
22.0%
15.7%
12.8%
CPI + 5%
10.9%
10.3%
11.2%

35. Investment Returns to 30 June 2013
1 year
3 years
5 years
UJ Wealth Creation
20.0%
15.5%
12.8%
CPI+7%
12.5%
12.4%
UJ Wealth Preservation
13.9%
11.3%
9.6%
CPI+5%
10.5%
10.4%
UJ Shari’ah
6.9%
7.6%
6.0%
UJ Capital Guarantee
13.8%
10.0%
8.3%
CPI+3.5%
9.0%
8.9%
UJ Capital Protection
9.9%
8.4%
9.2%
CPI+3%
8.5%
UJ Money Market
5.3%
5.7%
7.5%
CPI+1.5%
7.0%
 TRUSTEE PORFOLIO
1 year
3 years
5 years
Trustee
23.8%
17.7%
14.0%
CPI + 5%
10.5%
10.4%

36. Investment Returns to 30 September 2013
1 year
3 years
5 years
UJ Wealth Creation
21.6%
16.3%
14.7%
CPI+7%
12.9%
12.7%
12.1%
UJ Wealth Preservation
14.6%
11.6%
10.7%
CPI+5%
10.9%
10.1%
UJ Shari’ah
15.2%
9.7%
UJ Capital Guarantee
10.6%
8.5%
CPI+3.5%
9.4%
9.2%
8.6%
UJ Capital Protection
10.0%
9.6%
CPI+3%
8.8%
8.7%
8.1%
UJ Money Market
5.7%
7.2%
CPI+1.5%
7.3%
6.6%
 TRUSTEE PORFOLIO
1 year
3 years
5 years
Trustee
26.3%
17.7%
16.2%
CPI + 5%
10.9%
10.7%
10.1%

37. Investment Returns to 31 December 2013
1 year
3 years
5 years
UJ Wealth Creation
20.3%
16.2%
16.0%
CPI+7%
12.4%
12.7%
12.5%
UJ Wealth Preservation
11.6%
11.3%
CPI+5%
10.4%
10.7%
10.5%
UJ Shari’ah
18.5%
9.5%
11.4%
UJ Capital Guarantee
15.1%
11.2%
9.1%
CPI+3.5%
8.9%
9.2%
9.0%
UJ Capital Protection
7.7%
8.4%
9.4%
CPI+3%
8.7%
8.5%
UJ Money Market
6.0%
5.7%
6.8%
CPI+1.5%
6.9%
7.2%
7.0%
 TRUSTEE PORFOLIO
1 year
3 years
5 years
Trustee
24.3%
17.2%
17.0%
CPI + 5%
10.4%
10.7%
10.5%

38. Investment Returns to 31 March 2014
1 year
3 years
5 years
UJ Wealth Creation
18.0%
16.7%
17.5%
CPI+7%
13.1%
13.0%
12.4%
UJ Wealth Preservation
12.1%
11.9%
CPI+5%
11.1%
11.0%
10.4%
UJ Shari’ah
18.9%
12.2%
UJ Capital Guarantee
15.1%
11.7%
9.7%
CPI+3.5%
9.6%
9.5%
8.9%
UJ Capital Protection
8.1%
8.7%
CPI+3%
9.1%
9.0%
8.4%
UJ Money Market
6.6%
5.7%
6.5%
CPI+1.5%
7.6%
7.5%
6.9%
 TRUSTEE PORFOLIO
1 year
3 years
5 years
Trustee
20.7%
17.7%
18.6%
CPI + 5%
11.1%
11.0%
10.4%

39. Risk Profile – Where do I fit in?
The most important factor is:
How much risk can I take?

40. Risk Profile – Where do I fit in?
Member’s investment horizon - i.e. duration of membership of the Fund
Member’s dependence on Fund’s assets
Member’s tolerance for investment risk

41. Guidelines for Investment Choice
Members who fall within the following categories should consider the applicable portfolios:
Members younger than 53 – Wealth Creation
Members between 53 and 60 – Wealth Preservation
Members 60 years and older – Capital Protection

42. LifeStage Model – Default/Trustee Choice
Based on the assumption that younger members can accept more risk due to their long investment time horizon
As a member ages, his/her risk is reduced by reducing his/her equity exposure
Portfolio suitable for members who are uncomfortable with making an investment choice

43. LifeStage Model – Default/Trustee Choice
Member’s age
Wealth Creation Market Linked Portfolio
Wealth Preservation Market Linked Portfolio
Capital Protection Market Linked
Portfolio
Up to 53 years
100.0%
53 to 54 years
66.7%
33.3%
54 to 55 years
55 to 58 years
58 to 59 years
59 to 60 years
60 to 65 years

44. Risk Return Profile Risk Expected Return Wealth Creation
Age 54 & younger
Wealth Preservation
Life Stage Model
Shari’ah Compliant
Capital Protection
Age 59 & older
Risk
Guarantee
Money Market
Expected Return

45. LifeStage Model – Default/Trustee Choice
Portfolio restructuring in terms of member’s age completed automatically on an annual basis on your birthday
Life Stage Model constructed on assumption that members will retire on average at age 62 years

46. Administration Aspects: Annual Switching
Members must exercise choices on or before Friday, May 2013
A member’s assets will not be invested in more than one portfolio (please choose only one portfolio)
Investment choices – once annually

47. Administration Aspects
Option forms to be returned to:
Mrs. Maggie Langedyk
Human Resources
Resourcing Division
B5 Building
APK Campus
Kingsway Road
Auckland Park
Or via

48. Thank you for attending this session!

49. Thank you
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