FNB umbrella pension and provident funds review 2022

Businesses can purchase the FNB umbrella pension and provident plans for their employees. A company will benefit by purchasing umbrella items from FNB since FNB will reward the company for purchasing the product(s) for its employees. Any business that is incorporated in South Africa is eligible for the umbrella pension and provident funds.

The umbrella pension and provident funds can be combined with different employee insurance plans. The product can be enhanced with insurance features including life insurance, disability insurance, and funeral insurance. However, the employer will still have to make the request on the employees’ behalf. 

The idea will be beneficial to both regular employees and senior managers in the company. Depending on each person’s demands for retirement, the provident and pension options will be offered and tailored for each employee. As a result, each provident and pension fund varies depending on each employee’s needs.

Contributions into the provident and pension funds will be made to the respective funds selected by the employer. The employee does have the choice to handle his or her retirement fund, though. The chosen funds will be from the FNB unit trusts series, and most have an inflation-beating performance goal.

By assisting employees in making retirement plans, the FNB umbrella provident and pension funds are beneficial for boosting employee morale. The provident and umbrella pension funds of FNB are further examined below.

FNB umbrella pension and provident funds summary 

Companies or organizations use the FNB umbrella pension and provident funds as investment vehicles to get their workers ready for retirement. The amount that each employee contributes to the FNB umbrella pension and provident funds will vary depending on their specific needs. At retirement, the funds contributed to the umbrella pension and/or provident fund will be available.

However, there are some circumstances in which early withdrawals can be made prior to retirement. For instance, a withdrawal from the fund may be made if an employee has a fatal illness and is predicted to survive no more than 12 months. For the examination to be accepted, it must have been performed by a licensed physician.

Different criteria can be used to make contributions to the fund, but the monthly debit order approach is by far the most prominent. Ad hoc or lump sum contributions are two additional ways to fund a pension or provident fund.

The umbrella pension and provident funds invest contributions into one or more funds that are run by FNB. When purchasing the product, the employer has the option to select a ‘trustee choice default’ that makes investments on the members’ behalf. Members can also control where their funds are invested.

Provident and umbrella pension investments will be spread over a variety of investment portfolios. The following is a list of some of the investment funds that the umbrella pension and provident funds can unvest in.

List of unit trusts that the FNB umbrella pension and provident funds invests in:

Benefits of choosing FNB umbrella pension and provident funds 

There are many benefits of investing in the FNB umbrella pension and provident funds, not just for the employer but also for the employees. The following is a list of the product’s benefits.

Benefits to employers

  • Employers who subscribe to the FNB umbrella pension and provident funds have access to the FNB online services. The digital platforms of FNB can be used by the employer to handle the product online.
  • Given that FNB offers a one-stop shop for all retirement solutions for business personnel, the administrative burden on the organization is reduced. There is no need to hand-pick retirement products.
  • Each employee’s maintenance costs for retirement products are reduced. Each individual investor will get updates and all communications pertaining to the retirement program from FNB.
  • A business has access to complete administrative and financial support teams.

Benefits to employees

  • Each employee who has made an investment in the FNB pension and provident funds gets online access to the fund’s information. This is so that the fund’s members can access FNB’s digital platforms.
  • Employees can access financial and educational tools at no additional cost.
  • Each member of the fund is eligible for a Will benefit. Employees receive free Will-drafting assistance from FNB.
  • Employees can occasionally get financial assistance from a team of financial consultants who are available to them at no additional cost.
  • When employees save money for retirement and have a qualifying FNB account, they receive eBucks points each month.
  • Tax-deductible contributions to the fund lower taxable income.
  • The investment does not need to be managed by employees.

Advantages of the FNB umbrella pension and provident funds 

  • Employees with FNB accounts can get eBucks points for contributions towards their retirement. 
  • Contributions to the fund will depend on each employee’s affordability. 
  • There is no need to manage the investment since the contributions are invested in funds managed by professionals. 
  • Members are given access to the FNB digital platforms to track their investments. This includes employees and employers. 
  • Employees can switch pension funds when moving from one job to another. 
  • There is access to financial assistance whenever needed by members. 
  • Financial tools and tutorials are available. 

Disadvantages of the umbrella pension and provident funds 

  • Investment can be accessed at retirement and only once before retirement. 
  • Employees may have or want a better pension fund than that of FNB. 
  • Not all employees want the product. 

Conclusion 

One method to ensure employees will have a brighter future after retirement is the FNB umbrella provident and pension funds. The members of the funds can relax knowing that their investments will increase because the contributions are placed in unit trusts that produce favourable returns over time. Dividends and interest will automatically be capitalized and accessed at retirement.