Your employees are your business's biggest asset. By providing retirement benefits, you are not only recognising their value, but making their futures a little more secure. In this article, we explore your options when you want to provide for your employees' retirement.
When you own a small business, you often get to know your employees on a personal level, and they become more like family. They, in turn, also have families to support, so providing benefits to your workers will go a long way in assisting them once they leave your employ.
What is a pension fund?
A retirement fund that is set up by an employer, and consists of money contributed by the employer and employees to provide pension fund benefits at retirement. Subject to tax, an employee may take up to one-third of their total retirement benefit as a cash lump sum. The remaining two-thirds must be used to provide a pension.
What is a provident fund?
A retirement fund that is set up by an employer, and consists of money contributed by the employer and employees, to provide a once-off payment at retirement.
What is a Retirement Annuity?
A retirement annuity, or RA, is a specialised savings product, specifically tailored to provide income for your retirement or supplement your pension. At retirement, the contributions you have made, plus the accumulated growth from the investment of your money, are made available to you.
What is disability cover?
Disability cover is a protection benefit that can be claimed when you can no longer work because of a disabling illness or injury. There are two types of disability cover benefits: income benefit and lump sum benefit. An income benefit replaces a portion of your income, while a lump sum benefit provides you with a cash lump sum.
If you haven't already, you should look into getting one (or two) of these kinds of policies for yourself and your business. It's never too soon to provide for your retirement or should an accident/illness prevent you from working. Providing benefits to your employees is one way of retaining their services, fostering loyalty, and showing that you truly appreciate their value in your business.
The content in this article was provided by Sanlam – a diversified financial services group, headquartered in South Africa, operating across a number of selected global markets.
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