RECENT NEWS
Good Governance for Retirements Funds
19th of March 2010
Good Governance for Retirements Funds
Read More...
Interest rate increase on Housing Loans
8th of June 2010
Interest rate increase on Housing Loans
Dear Sir /Madam
Kindly note that the current interest rate of 14% charged to the members for housing loans is not in accordance wiRead More...
Death Benefits Distribution
29th of June 2010
Death Benefits Distribution
There are new challenges facing trustees.
A more appropriate and sound way of ensuring that lump sum benefits owed to the minor children ofRead More...
Taxing early withdrawals
29th of July 2010
Taxing early withdrawals
In this article, Michael Summerton and Carla Rossouw provide an overview of how withdrawal and retirement benefits are taxed. They use practical eRead More...
IMPORTANT NOTICE TO EMPLOYERS AND EMPLOYEES
19th of November 2010
IMPORTANT NOTICE TO EMPLOYERS AND EMPLOYEES
Read More...
LOCAL NEWS
2nd of February 2011
LOCAL NEWS
Directives are NOT final!
Why when you withdraw your pension, you pay – and then pay again.
PIETERMARITZBURG - When pension or providenRead More...
Tax Information
11th of February 2011
DIRECT HOUSING LOANS
LEGAL REQUIREMENTS
In terms of the Pensions Fund Act, Retirement Funds are allowed to lend money (up to a maximum of 25% of their Assets) to their members foRead More...
Proposed Interim Retirement Reforms
2nd of March 2011
Proposed Interim Retirement Reforms
Read More...
Where has the retirement law gone?
24th of June 2011
Where has the retirement law gone?
Rumours have been floating around the industry that if employer contributions became taxable benefits in employees' hands, as proposed in the FRead More...
Sanlam calls for sea change in retirement industry
11th of August 2011
Benchmark research shows South Africans worse off now than 30 years ago Sanlam Employee Benefits (SEB) today released the results of its 2011 Benchmark survey, a comprehensive annual review ofRead More...
EVENTS
CURRENT RETURN
6% Fund 6% Trust
DIRECT HOUSING LOANS
LEGAL REQUIREMENTS
In terms of the Pensions Fund Act, Retirement Funds are allowed to lend money (up to a maximum of 25% of their Assets) to their members for the sole purpose of housing. The minimum rate of interest that can be charged on these loans is prescribed by the Income Tax Act. The Trustees are held liable to ensure that loans are used exclusively for housing, as the loans represent an investment by the Fund.
LOAN SCHEME
The Scheme allows for members to apply for loans for housing using their
accumulated benefits in the Fund as a guarantee against the loans. To protect all the members the Fund imposes the following Rules:
The loan must be for housing and must be accompanied by an acceptable Quotation and confirmation of affordability.
Cheques are made payable to the supplier/Housing Authority etc. In
circumstances where a member can confirm in writing that he/she
will be ensuring that the loan will be used for building or housing
purposes, the payment may be made to the member
The member must be able to afford the loan/ the monthly installment may not exceed 25% of his/her gross monthly earnings (proof will be required).
The loan is repayable over 5 to 10 years.
Only one loan will be allowed at any one time
The rate of interest charged is 15% (the current minimum allowed by law).
A monthly loan administration fee of R12,00 is charged.
Voluntary Life Assurance cover of R2.50 per thousand will be offered to cover the outstanding loan. An administration fee of R10 is charged for the operation of this Scheme.
The loan may not be more than 75% of the member’s retirement benefits accumulated in the Fund.
