Assessment: Fundamentals of Employer Sponsored Retirement Funds 19_20

Which ONE of the following Acts defines pension and provident funds?

Which of the following statement with regard to the legislative environment of retirement funds are correct?

i. A retirement fund can invest a maximum of 50% of total fair value of fund assets into listed shares.
ii. The Pension Funds Act deals exclusively with benefits provided to a group of people.
iii. An employer may make a unilateral decision on the benefits to be included in a retirement fund.
iv. A registered bargaining council can establish and administer a pension or provident fund.

Which of the following medium is mostly used by the Commissioner to communicate issues regarding retirement fund regulation to the industry?

Which of the following statements with regard to governance structure of pension funds are correct?

i. The role of the chairperson and the principal officer must be kept separate.
ii. The chairperson must be elected from the members of the board of trustees.
iii. A trustee must attain prescribed levels of skills and training within 6 months of appointment.
iv. The principal officer must contribute to the board meetings but does not have voting rights.

Which ONE of the following functions must be performed by an external professional as prescribed in the Pension Funds Act?

Please state if the following statement is true or false.

The Minister of Finance has appointed a Pension Funds Adjudicator to address any complaints that may arise as a result of the actions of a fund, its board of trustees or its administrator.

Complete the sentence.

In a defined contribution fund, the investment s strategy must be to provide returns-

Please complete the sentence.

An investment strategy, used by pension funds, that is based on the idea that investment returns are unpredictable form year to year but that they have a certain probability, is known as –

Big consultants are a partnership that recently established a pension fund for the benefit of their employees.
Which ONE of the following statements with regard to the membership of the fund is correct?

Which of the following statements with regard to umbrella funds are correct?

i. A participating employer must have their own board of trustees.
ii. A participating employer fund does not require its own board of trustees.
iii. The participating employers must be related by industry.
iv. The participating employers have no relationship to each other.

Which of the following is a feature of a defined benefit fund?

John invest in a pension fund with an accrual rate of 1/40. John had to wait 6 months after his date of employment before he was eligible to join the fund. This means that in a final salary scheme, John would have accrued-

Which one of the following statements with regard to pension and provident funds in South Africa is correct?

i. Funds operates on a pay as you go basis.
ii. Funds operates on a funded basis.
iii. Almost all funds are contributory.
iv. Almost all funds are non-contributory.

Which of the following is a disadvantage of a defined benefit fund?

A member resigned from his employer at the end of 2017. He decided to take R50 000 from his pension fund as a cash withdrawal. No cash amounts were taken prior to this. How much tax will need to be deducted from this amount (Rounded off)?

When a member exits a retirement fund, which of the following deductions can be made from the member’s benefit as defined in Section 37D of the Pension funds Act.

i. Maintenance claims
ii. Divorce orders
iii. Outstanding personal bank loans
iv. Home loans

Please state if the following statement is true or false.

In a defined benefit fund, the term minimum benefits mean that the member is entitled to the full asset value build-up at the time of leaving.

Pension interest with regard to a divorce settlement is defined on the fund value at which date?

Which of the following statements with regard to the minimum communication requirements are correct?

i. A retirement fund must provide a new member with an explanatory pamphlet within 3 months of date of admission to the fund.
ii. A retirement fund must provide a new member with an explanatory pamphlet within 6 months of date of admission to the fund.
iii. An annual benefit statement must be given to every member within 3 months after the financial year-end of the fund.
iv. An annual benefit statement must be given to every member within 6 months after the financial year-end of the fund.

Which one of the following is a special event that must be disclosed to all pensioners, deferred pensioners and dependents before the event?