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Yvette Harris | Principal Consultant

20 February 2014

Building Industry Pension Scheme

and Provident Fund (Western Province)

Report Back

Fund Governance

Fund is managed by the Board of Trustees

• 5 Employer representatives

• 5 Employee representatives

• 1 Independent Trustee

• Governed by the Registered Rules - revised rules registered and

approved in December 2013

• Trustees trained on an on-going basis

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if applicable

Objectives of the Trustees

• To manage fund to provide benefits to members and dependants

• Define contribution fund - minimises cross subsidies

• Transparent Investment Strategy

• Focuses on active members without neglecting vested benefits of

dormant members

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if applicable

Profile of Fund and Members

Building Industry Funds - statistics

2004 2012 2013

Active Members

Pension Scheme 17 490 7 216 8 931

Provident Fund 5 517 7 240 9 150

Dormant

Pension Scheme 192 000 197 797 197 473

Provident Fund 3 000 14361 15 248

Assets

Pension Scheme R 606,6 m R1 250,3 m R1 440,2 m

Provident Fund R 40,8 m R 223,9 m R 305,4 m

R 647, 5 m R1 474,3 m R1 745,6 m

Average Fund Value

Pension Scheme R2 895 R 6 098 R6 977

Provident Fund R4 798 R10 369 R12 517

Master slide

Graphs

Building Industry Funds - Members per Age group

0

25 000

50 000

75 000

100 000

125 000

150 000

175 000

200 000

225 000

< 25 25-33 35-45 45-55 55-65 >65 Total

629 7 990

34 391

53 739 56 830 52 825

206 404

1 604 10 674 7 306

3 410 1 120 284

24 398

Pension Fund Provident Fund

Member per age group

Benefits Payments paid in the past year

2012 2013

BENEFIT PAYMENTS NUMBER AMOUNT NUMBER AMOUNT

Death 231 R 14,4 m 120 R 15,5 m

Retirement 875 R 50,0 m 505 R 39,3 m

Resignation 4 239 R 95,7 m 2 377 R 68,0 m

TOTAL 5 345 R160,2 3 002 R122,9 m

Beneficiary Funds / Trusts

• Total children trusts - 162

• Capital value - 9.8 Million

• Monthly payments - Between R300pm and R500pm

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if applicable

Rule & Benefit Improvements

Fund Benefits

• Death benefits

• Disability benefits

• Family (Funeral) benefits

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if applicable

PROPOSED CHANGE

4 X annual wage for all active members irrespective of length of

membership of the Fund/s, however it will be subject to pre-existing

conditions

(This amendment will only be implemented once approved by the FSB)

Death Benefits

If a member dies while in service a death benefit is payable, as follows:

• Full Member Share in the Fund/s; PLUS

• A life insurance benefit, as follows, if he qualifies:

Changes introduced 1/11/2013

Old New

0% annual increase 6% annual increase

Increase in deemed employer contribution

Old New

6,32% 7,5%

Disability Benefits

An insured disability benefit is payable as a monthly pension, after a 4

month waiting period, if there is satisfactory evidence that an employee

in active services is permanently disabled:

The contribution requirement has just been removed from the policy wording but the pre-existing conditions still apply together with the qualification criteria, going forward!

Old Benefit

*New Benefit

effective

1/11/2013

Member R11 000 R15 000

Spouse R11 000 R15 000

Child 14- 21 R11 000 R15 000

Child 0- 13 R7 000 R11 000

Stillborn R7 000 R11 000

Family (Funeral) Benefits

*Cover continues until age 70 years*Paid-up benefits iro early retirement, normal retirement, ill-retirement and disability

Cost Analysis

YearGroup Life Cover

(Death)

Group Income Cover

(Disability)

Family (Funeral)

Cover

2009 1.95% 0.84% R9.20

2010 **1.68% *0.69% *R9.20

2011 1.65% 0.69% **R9.20

2012 1.65% 0.69% R8.45

2013 1.65% *0.69% R8.45

20141.48% /

**1.65%**0.69% *R8.45

Premium History

* Actual benefit increased** Benefit policy conditions improved

Premium History

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

2003 2014

33.80%

81.00%

66.20%

19.00%

Retirement

Risk & Admin

Thank you

Labourer Tradesman (Class 2) Artisan

Average salary per annum R32 867 R81 810 R109 583

Death Benefit (4 x R41 598) R131 468 R327 240 R438 336

Disability Income (70%) R23 007 R57 267 R76 709

Member Profiles