Monday 16 March, 2015
Remit timely to benefit with interest
The FUND is strongly encouraging employers to remit monthly contributions on time in order for members to benefit from the interest credited annually.
In an awareness campaign through its monthly newsletter and Facebook page the Fund explained the time weighted methodology as the basis for calculating the interest earned on a member’s account. Basically, interest is earned on a member’s account when the monthly contributions are remitted on time and credited to that account.
Team Leader for the Employer Services Division, Michael Pokanau said that under the Superannuation (General Provisions) Act 2000, contributing employers must remit contributions on or before the 14th day of the new calendar month.
He said that when employers remit on time throughout the year, members will benefit from the full interest crediting rate because the time weighted method is designed to accumulate interest. The longer funds sit in a member’s account, the more interest it earns.
He also stated that another benefit to remitting on time is that members see up to date balances through the FUND’s website and mobile phone TextBal services.
An additional benefit is the amount of Housing Advance a member is eligible to receive is greater. This provides more funds for members planning to buy a home or to renovate an existing home under the Housing Advance Scheme.
Superannuation Savings are meant for the long haul, so the FUND is reminding members that their retirement savings are purposely to provide a comfortable quality of life after they leave work at retirement.
The FUND is cognizant that members face genuine financial hardship for many reasons but many members are doing themselves a great disservice by withdrawing their savings early, especially when they have the capacity to be reemployed. A high balance built up through the FUND’s return on investments and the effect of compound interest will not be achieved if savings are depleted through frequent withdrawals.
The FUND’s role is not only to manage member’s funds, but educating members to adopt a savings culture.
The FUND is also encouraging members to increase their employee portions above the minimum 6% threshold if they wish to save more and optimize the benefits.
[Photo caption: Coco-Cola Employees filling in forms to update their personal details during a recent shop floor presentation]
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