A new global retirement fund and medical plan, specifically designed for South African expatriates, has been launched by consulting, technology and outsourcing firm EOH.
The Global Retirement Fund (as it is known) is administered by Equilibrium Pensions, on the Isle of Man, thereby granting members tax-free benefits. Company MD Tim Boles says the Isle of Man has become a key location for offshore pensions, with the number of international schemes rising more than six times, from 109 in 2006 to 664 in 2010.
Local coordination and consultation is handled by EOH, which is represented in 23 African countries. EOH is also a trustee in the pension fund.
EOH employee benefits business development manager Mike Hogan says, although offshore pension schemes have existed for some time, EOH has refined the concept to cater specifically for South Africans working in other African countries. The medical plan is also geared towards catering for the needs of South Africans working in other African countries, with evacuation to South Africa in cases of critical emergencies a priority, so that members can get appropriate care from facilities in their home country.
He says other pension schemes and medical plans used for South African expatriates can be an “administrative nightmare” for human resources departments, especially when the company is a multinational operating in Africa, with employees in more than one African country. In this regard, employees working in different jurisdictions would be subject to different laws regarding membership of local schemes, as well as currency and exchange rate discrepancies.
However, Hogan says the Global Retirement Fund, although denominated in US dollars, is also available in sterling and euros – the currency being selected by the employer at inception.
The asset accumulation is tax free, as is the lump sum of exit benefits.
Further, the fund is also fully transportable, even if the expatriate decides to return and remain in South Africa. It also enables a member access to the funds at any point, with no retirement age limit. It is also not compulsory for the member to open a retirement annuity once they exit the fund, as the savings raised are entirely at their disposal to use as they wish.
Several advantages also exist for the employer of members signed up to the fund, including third-party oversight, cost- effective and professional administration, and peace of mind for employer and employee.