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purchase a pension unless it amounts to lessthan R275 000, in which case it may also betaken as a taxable cash lump sum.GROWING YOUR MEMBERBALANCE EVEN MORESHAREThe LA Retirement Fund allows you to saveeven more towards your retirement if youwant to. You can do that by making extravoluntary payments into your fund account, viayour payroll whenever you have the money todo so. Remember, the more you put into yourretirement fund now, the more it will pay outto you one day when you retire – especially ifyou leave your member share to keep growingright up until your retirement date.KEEP AN EYE ON HOW YOUR RETIREMENTSAVINGS ARE GROWINGSince you have your own fund account, you cancheck on how your retirement fund savings aregrowing whenever you like. To do that, simplyregister and login by clicking “member logon”on the home page of the LA Retirement Fundwebsite www.laretirementfund.co.zaWHO LOOKS AFTER THE LA RETIREMENT FUND (AND YOUR SAVINGS)The LA Retirement Fund places a priority onbeing well managed and keeping to the rulesand laws that govern retirement funds in SouthAfrica and it thereby ensures that fundmembers are protected and looked after. Make decisions about who should receivethe death benefits of members who havepassed away in-service. Help resolve any disputes lodged bymembers about various aspects of theirfund. Know and understand the rules of the fundand be aware of any changes to the lawgoverning the fund.A Board of Trustees is in charge of managingthe fund and making decisions about itsinvestments, benefits and structures all in thebest interests of its members. At least 50% ofthe members of this board are elected bymembers and pensioners which means youhave a say in who manages the fund. Theremaining 50% comprises trustees who areappointed and elected by local authorities andadditional trustees who may be completelyindependent (i.e. suitably experiencedindividuals who have no connection with localor national government).Since this is a really big and often complicatedjob, the Board of Trustees may call in variousexperts and consultants to help them makedecisions about the fund. However, thetrustees always have the final say and are fullyaccountable to you, as a member, for thedecisions and actions they take.The Board of Trustees is assisted by theprincipal officer in running the fund. Theprincipal officer must ensure that the decisionstaken by the board are actioned and that allthe fund’s service providers, including theadministrator, fulfil the conditions of theircontracts and mandates.In addition to being responsible for effectivelymanaging the fund from day to day, the Boardof Trustees has to: Assess and select appropriate investmentsand investment managers. Communicate with fund members and keepthem up to date about all matters regardingtheir fund.To see who the trustees of the LA RetirementFund are right now go to:www.laretirementfund.co.za.7

(consolidation phase) as you near retirementage.YOUR BENEFITS EXPLAINEDINVESTMENTSImportantly, this strategy ensures your easytransition at retirement, enabling you tochoose to have your retirement savingsautomatically invested in a living annuity inthe fund when you retire. The In-Fund livingannuity will provide you with a cost-effectivepension income during your retirement years.As a member of a defined contribution fund,you carry the investment risk. This means thatyour invested member share is directlyaffected by any positive or negative returnsearned by the investments you have chosen.Since every fund member has differentinvestment needs, expectations and riskappetites, the LA Retirement Fund developedan innovative life stage investment strategythat provides members with an appropriatebalance of risk and expected return at differentstages in their working life. The contributionsyou and your employer make to the LARetirement Fund are invested, by default, intothe Life Stage Investment Model.The two phases of the life stage portfolio areillustrated in the following diagrams:How the life stage investment strategy worksThe strategy sees to it that your member shareis automatically invested according to howmany years you have left until your normalretirement age. The younger you are, thelonger you have to invest until retirement. As aresult, your investment can be exposed tomore risk and is placed in more aggressiveinvestments in an effort to earn higher returns.The older and closer to retirement you are, themore protection your retirement savings need.As such, your investment is shifted to less riskystrategies, which may deliver lower growth,but will also keep your capital safe.Below are some of the benefits that life stageinvesting gives you: The life stage investment strategyautomatically moves you through these phases– from a more aggressive investmentapproach (accumulation phase) with a focus onlong term capital growth when you areyounger than 60 to a more protection-focusedconservativeinvestmentstrategy 8Cost effectiveness and simplicity ofdesignthatrequiresminimalintervention from you.Protection of your retirement benefitsagainst the effects of inflation.Enhanced or optimal returns duringyour pre-retirement cycle or protected

returns during the transition phaseclose to your retirement.Acceptable risk levels given your timehorizon to retirement.Access to funds managed by topinvestment managers.Easy and seamless transition of yourmember share into the In-Fund livingannuity when you retire.phase, will be transferred in fourteen tranchesover a period of 3.5 years:To prevent you from being prejudiced bysudden or adverse market movements, yourmember share, when being switched from theAccumulation phase to the ConsolidationYour member share will be fully invested in theConsolidation phase exactly 2 years and 3months from your normal retirement age (i.e.3 months before turning age 63). The first tranche will be processed atthe beginning of the month followingyour attainment of age 59.5 years;7.14% of your member share willthereafter be transitioned to theConsolidation phase every 3 months.Transition Period 062.50140.00100.00100.0062.75 All contributions made during the 3.5 years transitional period will be invested in theConsolidation phase. The phasing process is automated and is handled by the Fund Administrator, so no actions arerequired from members.9

Alternatives to the life stage investmentstrategyWhile the life stage strategy is the defaultinvestment approach for the LA RetirementFund you are allowed to choose not to investin it and you can instead invest in any of thetwo underlying phases, namely theaccumulation (aggressive) phase or theconsolidation (moderate) phase. In addition tomaking use of one of these two life stagephases as a stand-alone investment option,you also have an option to invest in aconservative, low-risk option known as thepreservation portfolio with a focus on capitalpreservation or the cash plus option or theShari’ah compliant investment portfolio. Thecash plus option addresses capital risk andmay be considered by members who are veryclose to retirement and who do not wish to beexposed to negative returns in the short periodleading up to their retirement and may beconsidered by members planning to take alarge part of their benefit as a cash lump sum.The Shari’ah portfolio complies with Islamicinvestment principles and the investmentmanagers satisfy the guidelines and standardsas set from time to time by the IslamicAccounting and Auditing Organisation.The risk profile of this portfolio is moderateaggressive and can therefore be compared totheFund’sConsolidationandtheAccumulation portfolios. The Shari’ahcompliant Balanced Fund is not utilised for theFund’s default Defined Contribution orPensioner investment strategies and is a standalone portfolio for members wishing to investin this portfolio.Asset rementfund.co.za) for the latestasset composition and investment returnsearned within each portfolio and theapplicable investment targets.Changing your investmentYou can change your investment selectionwhile you are a fund member. You are alloweda maximum of two switches per fund year (i.e.between 1 July and 30 June) and the first ofthese switches is free. A switching fee ischarged for the second switch. This fee is takenfrom your member share being switched. It isrecommended that you speak to a financialadviser before making the decision to switchyour retirement investments. Contact theFund to obtain the current switching fee.10

WHAT HAPPENS WHEN YOU RETIRE OR LEAVE THE FUND?If you leave your employer due to resignation,dismissal, retrenchment or retirement, yourmember share becomes available to you as abenefit. Your benefit on exit includes the fullamount of your savings in your fund account,including the contributions you and youremployer have made plus the investmentreturns you have earned, less anyadministration costs and risk cover premiums.The benefit you receive will also be taxed. Theamount of tax depends on the savings amountand what you choose to do with it. Forexample, if you retire from employment andyou elect to take the maximum permitted cashlump sum, your tax will be much higher than ifyou took a small amount in cash and investedthe balance to provide you with a monthlypension.You are strongly advised to get professional financial advice before makingany decisions regarding your benefit on exit from the fund. The tax you payon retirement fund benefits is cumulative. This means that the tax you pay onone benefit will impact on other benefits you may receive from other funds.The tax scales are also progressive, which means that the bigger the lump sumbenefit you receive, the higher the rate of tax you will be chargedHere’s a closer look at your different benefitpayments depending on the reason for leavingthe fund:employer. Alternatively you may choose toretire from employment but elect to postponereceiving your retirement benefit from thefund to a later date (i.e. phased retirementfrom the fund). When you later choose toreceive your retirement benefit from the fund,your original benefit on retirement fromservice will be increased or decreased by therelevant fund returns to the date that youmade your final election and your benefit willbe calculated in terms of the fund’s rules. Interms of the rules of the fund applicable tophased retirement, your member share will beBENEFITS WHEN YOU RETIREAll members of the LA Retirement Fund have anormal retirement age of 65, however, youmay be eligible for early retirement from age50 (please note that taxation of anylumpsums prior to age 55 will be taxed interms of the withdrawal taxation table andnot the retirement taxation table). You mayalso choose to keep on working beyond age 65,but this will require the consent of your11

debited with such reasonable expenses as theBoard of Trustees may determine from time totime in line with the fund’s agreed practice.income is a fixed percentage of yourretirement capital. This percentage thenincreases every five years.You may exercise one of the following optionson retirement: Customised optionYou can choose to invest in any one or more ofthe LA Retirement Fund’s four investmentoptions (i.e. the accumulation, consolidation orpreservation phases or the Shari’ahinvestment portfolio). This flexibility alsoallows you to choose the investment optionfrom where your monthly income must bepaid. In addition, you are required to selectyour draw down rate from a range applicableto your age band. This effectively allows you tochoose the percentage of your total retirementsavings you can access as your pension income.You can then adjust this draw down rate everyyear by selecting the appropriate rate to meetyour needs from the range provided. Use your full benefit to purchase an InFund Living annuity from the Fund or Take part of your benefit as a cash lumpsum and use the balance to purchase anIn-Fund Living annuity from the Fund or Use your full benefit to purchase morethan one annuity of which one may be theIn-Fund Living annuity or Take part of your benefit as a cash lumpsum and use the balance to purchasemore than one annuity of which one maybe the In-Fund Living annuity or Transfer your full benefit to a retirementannuity or preservation fund (subject toSARS approval) or Take 100% of any vested right as a cashlump sum plus a maximum of 1/3rd ofyour non-vested right in cash andpurchase an annuity (as above) with theremaining 2/3rd non-vested right.As an In-Fund living annuitant, you may electto switch from the trustee endorsed option tothe customised option and vice versa once ayear on the anniversary of your retirement.Of course, you don’t have to invest yourretirement savings in the LA Retirement FundIn-Fund living annuity when you retire. Youalso have the option of investing your savingsin any other annuity you choose, or takingsome, or all, of your savings in cash*.ABOUT THE IN-FUND LIVING ANNUITYAs a member of the fund, you have the optionof moving a portion of or all your retirementsavings into a living annuity provided by thefund when you retire. Investing in this livingannuity is effectively the same as ‘buying’ acost-effective pension. Annuitants continue tobenefit from not only the low investment feesthey were used to as active members of theFund but also the sound governance practicesoverseen by the Board of Trustees.The benefit is subject to tax as shown in the taxtables available on the website at:www.laretirementfund.co.zaThe payment of cashlump sums on le from 1 March 2021. Refer to theFund’s website for further details.At retirement when you invest in the In-Fundliving annuity, you select one of two optionswhich will determine the investment of yourretirement capital and the amount of yourmonthly pension:All insurance benefits (death, disability, funeraland the critical illness benefit) cease when youretire from the Fund. If you purchase the InFund Living Annuity you have the once-offoption of purchasing an affordable funeralcover benefit for yourself and your spouse. You Trustee endorsed optionThis means that your savings are invested foryou in the consolidation phase of the fund. Theamount of money you can take (draw down)from your retirement capital as a pension12

may choose the cover amount applicable toyour age group.are available on the LA Retirement Fundwebsite (www.laretirementfund.co.za).BENEFITS WHEN YOU RESIGN OR AREDISMISSEDYour benefit will remain in the Fund until youcomplete and submit a withdrawal claim form(i.e. you automatically become a paid-upmember in the Fund until you submit yourclaim form and make an election on the waythe benefit should be paid out).If you end your service with your employerbefore you reach retirement age, you will notbe charged any penalties on your retirementbenefit payment. If you resign and leave thefund before age 50, your member share willbecome payable as a lump sum, which issubject to tax according to the tax tables whichYou have one of the following 4 options onresignation:13

This additional amount is paid by youremployer to the Fund. The Fund in turn paysyour member share plus the additional amountpaid by your employer as a lump sum amountto you. The same rate of tax applies as onretirement, as shown in the tax tables whichare available on the LA Retirement Fundwebsite (www.laretirementfund.co.za). Thesame benefit options as set out above applyunder resignation/dismissal.BENEFITS ON RETRENCHMENTIf you are retrenched, your member share willbe paid out by t

Fund's Retirement Benefits Counsellor: 021 943 5305 Fund Registration No: 12/8/1278/2 Family Assistance Service from Sanlam (Reality Access): 0860 732 548 or 9