Beneficiary Fund

Beneficiary Fund

The SALA Beneficiary Fund was set up by the SALA Pension Fund and was successfully registered with the FSB on 22 June 2009.

SALA BENEFICIARY FUND (“The Fund”)

Background

The South African Local Authorities Pension Fund has established a beneficiary fund called South African Local Authorities Beneficiary Fund.  The purpose of the Beneficiary Fund is to protect the inherited assets of the minor children of deceased members and ensure that they benefit from their parents’ investment.  As a requirement, SALA Beneficiary Fund was registered with the Financial Services Board (FSB) on 22 June 2009, in order to accept the payments from the Pension Fund. The Fund has appointed Bophelo Benefit Services, an FSB registered financial services company, as the Administrator of the Fund.

What is a Beneficiary Fund?

A Beneficiary Fund is a legal entity that is setup in accordance with the Pension Funds Act for the purpose of accepting Section 37C death benefit payments.   The Beneficiary Fund has a board of trustees who are there to ensure that the monies (or other assets) are administered with the necessary care for the benefit of the beneficiaries. It is an efficient and flexible way to ensure that assets are looked after. It also ensures that assets are objectively managed and controlled by the appointed trustees in the best interest of the beneficiaries. The Beneficiary Fund has its own rules, its own Board of Trustees and a Principal Officer (who reports to the board of trustees and is responsible for the daily running of the Fund).

Board of Trustees

Mr Hendry Collins – Chairperson

Mr Sam Makatikela – Principal Officer

Mr Thulani Shabangu – Trustee

Mr Norman Motlhasi – Trustee

Mr Wilberforce Kgakane – Independent Trustee

When is a Beneficiary Fund setup?

A beneficiary fund account is set up when a member of SALA Pension Fund passes away. The death benefits are then paid over by the Pension Fund to Bophelo Benefit Services with the instruction that a beneficiary fund be setup. The Fund is setup for the benefit of the beneficiaries of deceased members of the fund; usually minor children (under 18 years) and/or children that are still attending school/tertiary institutions and those  that are disabled.

How does a Beneficiary Fund operate?

  • The lump sum amount received from the Fund is invested by Investment Consultants of the Fund.
  • Interest is then earned on this investment and distributed to the beneficiaries’ accounts.
  • The Trustees have resolved that income be paid on quarterly basis into the guardian’s bank account for the benefit of the beneficiaries (This amount is not intended as a substitute for the late member’s salary, but to assist the guardian).

Our Service to the beneficiaries/guardians

The Trustees of the Fund have the following fiduciary duties with respect to the beneficiaries/guardians:

  • Ensure that they have the necessary expertise and show due care when dealing with the beneficiary fund assets.
  • Act in good faith.
  • Ensure that all decisions and actions are taken according to the rules of the Fund.
  • Keep a close watch over the Administrators to ensure beneficiaries’ assets are managed properly according to the law.
  • Ensure that the Fund is managed in a transparent and fair manner, that there is adherence to the rules of the Fund, and that the rules are in line with the relevant legislation.

The Trustees will also ensure that the Administrator of the Fund, Bophelo Benefit Services fulfils the following with respect to the beneficiaries:

  • Personalized and to the point service.
  • Complete, timely and accurate information in order that they may be satisfied that their best interests are being looked after.
  • Openness and transparency.
  • Effective communication in various languages.
  • Bophelo Benefit Services offers walk-in centres in Johannesburg, Durban and Rustenburg.

The beneficiaries meet with a consultant or administrator face to face for information and advice.