Employee Benefits Schemes provide valuable protection to the employee and the employer, as these benefits often include risk cover. Employee Benefits Schemes are also an important consideration when attracting and retaining key staff.
The Pension or Provident Fund is tailored to the needs of the company (employer) and its employees. An amount is contributed on behalf of each employee every month and this goes towards retirement savings by way of a payment which comes off their monthly salary or wage. This “pot” grows monthly through the contributions made by both the employees and the employer, as well as through the growth of the investment. The money accrued in this account is for the employee only.
When the employee leaves the company, the employee has the option of leaving their savings in the fund; to withdraw in cash; or to preserve their savings by transferring these funds to a new employer’s fund, a preservation fund or a Retirement Annuity.
If the employee decides to withdraw their funds rather than to preserve, these savings will be taxed, and the employee will be less likely to have sufficient savings when they reach retirement age.
There are significant advantages to saving through a retirement scheme rather than with after-tax money. This decision needs to be carefully considered and thus it is always advisable to seek expert advice.
Contact Quattro Investment Brokers on 031 242 5100 for more information or fill out the form below and they will contact you.