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Pension Funds

The Old Mutual Employee Benefits Division offers three types of pension funds designed to deliver value to the different market segments in which we offer our services.

The three types of pension funds offered are as follows:

  • Defined Contribution Scheme
  • Defined Benefit Scheme
  • Hybrid Scheme (combines the features of the above two schemes)

Defined Contribution Scheme

The employer, in consultation with employees, chooses contribution levels for the purposes of pension build-up during the period of employment. The amount of pension payable on retirement is based on the amount of money in a member’s pension account at the time of retirement. While this method makes budgeting easier for the employer, challenges may arise for the employee at retirement if the pace of pension build-up is compromised by factors which may include poor performance of the investment markets resulting in poor levels of pension.

Defined Benefit Scheme

Pension benefits are pre-defined by a formula that takes into account the member’s pensionable service and salary at or close to retirement. The pension fund type makes it easier for a member to plan for retirement but financial challenges may be posed to the employer if mandatory tri-annual actuarial valuations reveal a funding shortfall.

Hybrid Pension Scheme

The Hybrid Pension Scheme is a combination of a Defined Benefit and a Defined Contribution scheme. The Fund targets a desired minimum level of pension using a Defined Benefit Underpin in order to mitigate the risk of poor benefits. The burden of funding for retirement is shared between the employer and employees.

Payment of pension at retirement

The following products cater for the pension payment needs of retiring pension fund members:

Old Mutual Pension Plus

With this option, the retiring member surrenders his/her pension capital in exchange for a pension from Old Mutual. The purchased pension is guaranteed by Old Mutual and is reviewed once annually. This allows the pensioner's income to grow in sympathy with investment growth.

Old Mutual Emerald Managed Pension

The Old Mutual Emerald Pension allows the pensioner who has sizeable capital to have ownership of the balance capital. In the event of death of the pensioner, the balance capital becomes part of the pensioner’s estate. Subject to market conditions, pensioners under the Emerald Pensions are able select a proportion of their balance capital that they would want to receive annually.

Administration and Consultancy Services

Old Mutual offers competitive administration and consultancy services for all three types of pension funds (Defined Benefit Schemes, Defined Contribution Schemes and Hybrid Schemes). The pension funds are administered on either an Insured or Self Administered basis.

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