Proposed extension of provident fund deadline must be used to educate members on positive impact – GTC
The National Treasury’s call on Parliament to extend the deadline on the proposed annuitisation of provident fund benefits by another year to 2019 is not ideal, but should this time be used to ensure proper communication with stakeholders, it may have a substantial and positive impact for millions of South Africans. This is the opinion of Celeste Kruger, Consultant: Employee Benefits at leading wealth and financial advisory firm GTC. National Treasury first introduced the regulation aimed at harmonising the tax treatment of provident and pension funds in 2015. “This is an attempt by the government to assist employees to retire more comfortably and handle their retirement savings responsibly, requiring them to invest two thirds of their retirement savings into retirement income products, such as an annuity, all the while retaining their option to withdraw a third as a cash lump... Read More
Investors who overreact to US vs North Korea ‘war talks’ could risk significant portfolio damage
Investors who get ‘spooked’ by the possibility of a looming war between North Korea and the United States of America should not be tempted to make rash portfolio changes due to this news. It is likely to do more harm to their long-term performance than if investors opt to ride out the pending storm. Clive Eggers, Head – Investment Analytics, GTC says that it is more important to spend time and attention on portfolio construction to ensure it can withstand known and unknown shocks. “It is understandable that investors become concerned when they see news suggesting the world may be facing another war, but a panic reaction can be extremely detrimental to long-term savings.” Market volatility has increased sharply following a ‘war of words’ between the US and North Korea over the past week, raising fears of a nuclear war.... Read More
Approved or unapproved death benefits – beware of hidden tax implications for loved ones
Knowing whether your death benefits are approved or unapproved in terms of the Pension Funds Act may save your loved ones from any unexpected tax surprises at an already difficult time. “The nature of death benefits rarely gets enough attention from ‘the living’ but the tax implications of this benefit can become a substantial burden on the beneficiaries you intend providing for,” says Celeste Kruger, Consultant – Employee Benefits Consulting, GTC. Death benefits from retirement funds are subject to the requirements of Section 37C of the Pension Funds Act, and they are taxed in terms of the Second Schedule of the Income Tax Act (see scales at the end of the article). “Most employers provide for a death benefit – usually a lump sum amount – to employees in addition to a retirement benefit. But the way in which this... Read More
Be careful when considering cutting short-term insurance cover, especially in a tough economy – GTC Risk Solutions
In tough economic climates – such as the recession South Africa finds itself in at the moment – households and small business owners may be tempted to reduce their short-term insurance, but the short-term savings may not justify the long-term cost of recovery in the event of a natural disaster. Roy Wright, Head – Risk Solutions at leading financial advisory and wealth management business GTC, says consumers need to ensure they know exactly what their insurance policies provide cover for, especially considering the possible effects of floods or fire. The recent storms in Cape Town and the devastating fires along the Garden Route, particularly in Knysna, are tragic reminders of the ongoing need for inclusive cover. “Most modern insurance policies offer comprehensive cover, which protect against many eventualities, from theft or damage to natural disasters, such as floods and fire.... Read More
Is a medical aid from a larger scheme always better? GTC Medical Aid Survey 2017 results reveal small medical aids also offer good value.
Findings for 2017 also highlight consumers may be unaware of their own medical aid plans and the benefits therein. Smaller medical schemes perform well by offering consumers value for money, but they have not been as successful as some of the larger schemes in attracting new members, and thereby ensuring continued value and ‘health’ for the scheme over the long term. This is one of the significant conclusions from leading wealth and financial advisory firm GTC in its seventh annual Medical Aid Survey for 2017, according to Jill Larkan, the firm’s Head: Healthcare Consulting. The Medical Aid Survey analyses and rates medical aid schemes and it further provides a standardised comparison and ranking of the choices available to consumers. “This survey cuts through the notoriously complicated landscape of the medical aid industry and simplifies it according to the factors that... Read More
Cyber-crime requires specialised protection against unique risks
The majority of businesses in South Africa are aware of the risks of cyber-crime, but very few of them have adequate – if any – cover to protect their organisations in the event of a cyber-attack. “A report by AT Kearney, Global Management Consulting Firm, has revealed that South Africa is the third most vulnerable country in the world for cyber-attacks, and the most vulnerable in Africa,” says Roy Wright, Head: Risk Solutions at leading financial advisory and wealth management business GTC. “Cyber security is a real business risk that can affect a company of any size anywhere in the world, but too few local companies are taking steps to insure their organisations against this risk.” Grant Thornton’s recent International Business Report on cyber security reveals that 88% of businesses in South Africa have identified exactly where all their data... Read More
Specialist protection is essential to guard against cyber crime
South Africa ranks as one of the most vulnerable countries in the world for cyber attacks, yet local businesses are largely discounting this risk and not protecting themselves adequately in this regard. Roy Wright, Head: Risk Solutions at leading financial advisory group GTC believes small, medium and micro enterprises (SMEs) are especially exposed to the dangers of cyber crime. “While unseen, crime in cyberspace presents one of the biggest threats to businesses today,” says Wright. “A report by AT Kearney, Global Management Consulting Firm, has revealed that South Africa is the third most vulnerable country in the world for cyber attacks, and the most vulnerable in Africa.” According to a recent Global Economic Crime Survey by PWC, cyber crime is also now the fourth most reported economic crime. Wright says that many smaller business executives believe that only large corporations... Read More
Worldwide Capital merges with GTC, enhancing asset management capability
GTC proudly announces the merging of Worldwide Capital (WWC), an asset management business with core capabilities in the areas of smart beta tracking, indexation and the portfolio construction of bespoke investment products, with GTC. The merger, effective April 2017 sees WWC fully integrated into the asset management capability of GTC. GTC also gains a turnkey Protected Cell Company structure in Mauritius through the transaction. “We’re delighted to have Worldwide Capital join our organisation,” says Gary Mockler, GTC’s Group CEO. “We look forward to offering our clients the additional capability of low-cost algorithmic – or passive – investing, which can be constructed on a tailored basis”. GTC, formerly Grant Thornton Capital, currently provides a wide range of financial advisory, wealth management and employee benefits administration services to more than 2500 private clients; and some 85 000 retirement fund members, managed through a... Read More
High costs affecting retirement funds? Communication is the key to alleviating litigation
One of the more interesting trends that has recently emerged from the American retirement space is the practice of employees taking their employers to court over high costs associated with their pension funds. Toy Otto, Head – Employee Benefits Consulting at leading financial advisory group GTC, believes this trend might well find its way to South Africa in due course. “This may have serious consequences for the savings and retirement industry as we know it, if we do not adjust the way we report information back to our members.” Otto believes this is a natural consequence of employees becoming more empowered about their retirement options and rights, and the changes in regulation over the past ten years (as well as draft regulations to be introduced in the near future) which will encourage greater interest in costs and benefits relative to... Read More
