Ninety One Plc · LSE:N91
Ninety One — Ninety One IP Masterclass webinar (June 2020)
27 slides from Ninety One's conference presentation, Jun 17, 2020
Slide 1: Masterclass with Albert Coetzee and Marc Lindley
Masterclass with Albert Coetzee and Marc Lindley 1
Slide 2: Ninety One IP – A next generation platform
Ninety One IP – A next generation platform The three core elements leading to one great outcome for advisers Efficiencies and scale IFAs can deliver best A high level of in advisor practices investment outcomes administrative service for investors – Leading technology to – Financial planning tools t
Slide 3: Masterclass Webinars
Masterclass Webinars Date Topic 17 June Legal update 24 June Local policy wrappers 1 July Why use a bank account when you can use a policy wrapper? 8 July Interrogating offshore investment solutions 15 July The offshore cash conundrum 22 July All about beneficiaries 29 July Section 10C- Disallowed c
Slide 4: Legal update
Masterclass Legal update Salome Young Janine Langenhoven
Slide 5: Disclaimer
Disclaimer All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an adviser or in a fiduciary capacity. No one should act upon such information
Slide 6: Agenda
Agenda 01 Options when facing retrenchment 02 Taxation of public sector fund benefits 03 COVID-19 relief for annuitants 04 Montanari judgement 6
Slide 7: Retrenchment
Retrenchment sé
Slide 8: Options to consider when facing retrenchment
Retrenchment Options to consider when facing retrenchment Many South Africans are currently facing retrenchment from employment & have some difficult decisions to make… 8
Slide 9: Voluntary vs involuntary retrenchment
Retrenchment Voluntary vs involuntary retrenchment Is there a difference? 1 2 Voluntary retrenchment Involuntary retrenchment – initial period of employer’s process – employer decides who will – employee can elect to take up an be retrenched offer of a severance package But – from a tax perspective
Slide 10: What is the employee entitled to receive?
Retrenchment What is the employee entitled to receive? Basic Conditions of Employment Employment Act contract & other The following benefits must be paid to an For example: employee who is retrenched: – Bonusses / pro-rata bonusses – accrued leave – Amounts payable in terms of – notice pay if the em
Slide 11: What qualifies as a severance benefit?
Retrenchment What qualifies as a “severance benefit”? A severance benefit is defined in the Income Tax Act as: An amount received / accrued in respect of relinquishment, termination, loss, repudiation, cancellation or variation of employment, if: person attained age such relinquishment, termination,
Slide 12: What about notice pay, leave pay & bonusses?
Retrenchment What about notice pay, leave pay & bonusses? Leave pay & Notice pay bonusses – Flows from – Regarded as contract of payment for employment services rendered Therefore: These do not qualify as “severance benefits” as defined Taxed in accordance with PAYE tables (i.e. at employee’s margin
Slide 13: Severance benefits: Options & Taxation
Retrenchment Severance benefits: Options & Taxation 1 Must be paid as lump 2 Taxed similarly to a 3 Will impact tax payable 4 May invest after tax sum; cannot be retirement fund benefit – iro future retirement benefit in an RA – transferred to retirement in accordance with fund benefits possible tax
Slide 14: What about retirement fund benefits on retrenchment?
Retrenchment What about retirement fund benefits on retrenchment? Employee may: – Transfer retirement fund benefit to approved fund (transfer is tax neutral) – Receive as a lump sum (taxed in accordance with retirement tax table) – Combination Taxation of Retirement Lump Sum or Severance Benefit Tax
Slide 15: Example
Retrenchment Example Scenario 1: Scenario 2: Employee receives severance benefit and Employee receives severance benefit, transfers takes lump sum from retirement fund retirement fund benefit to preservation fund, and takes once-off withdrawal from preservation fund Severance benefit R300,000 R300,0
Slide 16: Taxation of public sector fund benefits
Taxation of public sector fund benefits
Slide 17: Taxation of public sector fund benefits
Taxation of public sector fund benefits Many members of public sector retirement funds are considering their options on resignation or retirement… 17
Slide 18: Formula for calculating taxable portion
Taxation of public sector fund benefits Formula for calculating taxable portion: – Lump sum benefits paid by public sector funds represents the total number of represents the lump were only taxed with effect from 1 March 1998 completed years of membership sum benefit payable – The pre-1 March ‘98 ta
Slide 19: Value of D in the formula by scenario
Taxation of public sector fund benefits The value of “D” in the formula On retirement from the public sector fund, the formula only may differ, depending on the applies to that portion of the benefit taken as a lump sum - not scenario: the total benefit On resignation, the formula is applied to the
Slide 20: Can member lose pre-March '98 benefit on transfer?
Taxation of public sector fund benefits Can member lose his pre-March ‘98 benefit if he transfers to another fund? The pre-March ‘98 benefit will With effect from 1 March 2018, the only be retained where benefits pre-March ‘98 tax-free benefit is also were transferred from a public retained where th
Slide 21: Example
Taxation of public sector fund benefits Example Scenario 1: Scenario 2: Member’s public sector fund benefit is R9mil, Member retires directly from the public sector fund with which he transfers to a preservation fund on a total benefit of R9mil. He takes 1/3 of the benefit as a A=B/CxD resignation.
Slide 22: Covid-19 relief for annuitants
Covid-19 relief for annuitants
Slide 23: Covid-19 relief for annuitants
Covid-19 relief for annuitants From 1 June to 30 What happens if relief At end of relief period: Increased de minimus September period is extended? – Annuitants are allowed – The annuity income % – Income will – R50 000/ R75 000 to temporarily make selected for the relief automatically revert to inc
Slide 24: The impact of Montanari
The impact of Montanari
Slide 25: Montanari judgement - SCA
Montanari judgement - SCA Q Does my spouse have any right to my ILLA capital or income on divorce? A recent Supreme Court of Appeal case dealt with this issue. – Court reaffirmed that capital in living annuity is not an asset in annuitant’s estate (the underlying capital is owned by the insurer). –
Slide 26: Thank you!
Thank you! q 5
Slide 27: Disclaimer
Disclaimer All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an adviser or in a fiduciary capacity. No one should act upon such information
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