Steps to take to re­tire with tax ben­e­fits

New re­tire­ment fund tax laws af­fect em­ploy­ees’ tax­able in­come con­tri­bu­tions or de­duc­tions, writes Romeo Msipha

CityPress - - Careers -

Also, the new higher con­tri­bu­tions rates may only be im­ple­mented for new em­ploy­ees and are vol­un­tary for ex­ist­ing em­ploy­ees to en­sure smooth im­ple­men­ta­tion. 4 Find out if changes need to be made to the fund rules Em­ploy­ers need to con­firm if the Mas­ter Rules of their re­tire­ment fund make pro­vi­sion for ad­di­tional vol­un­tary con­tri­bu­tions. This will re­move the need to make any changes to their Mas­ter Rules or Spe­cial Rules. 5 Part­ner with em­ploy­ees to help them make the right choices There are a few ways busi­nesses can help make this process eas­ier for em­ploy­ees: Give em­ploy­ees easy-to-un­der­stand guide­lines on the con­tri­bu­tion rates that would lead to a com­fort­able re­tire­ment. This could in­clude face-to­face work­shops and pre­sen­ta­tions so that mem­bers un­der­stand the ef­fect of con­tribut­ing more.

Use trig­gers to prompt them to take the right ac­tions. This could in­volve re­minders about the value of in­creas­ing their con­tri­bu­tions with their ben­e­fit state­ments or when they get their in­creases or bonuses.

Make sure every em­ployee fully un­der­stands the de­fault con­tri­bu­tion rate and that they will be pay­ing that min­i­mum if they don’t specif­i­cally choose an­other rate.

Make it easy for em­ploy­ees to com­mu­ni­cate with the hu­man re­sources de­part­ment or pay­roll about how much they want to con­trib­ute. Also en­sure that they know when they can change this rate and the fre­quency.

Give em­ploy­ees easy ac­cess to fi­nan­cial ad­vice, through work­place ad­vis­ers or con­sul­tants. 6 Ad­just the con­tri­bu­tions on monthly pay­roll sub­mis­sion Em­ploy­ers will need to ad­just their monthly pay­roll file sub­mis­sion to their pen­sion or prov­i­dent fund ad­min­is­tra­tor so that this in­cludes any ad­di­tional con­tri­bu­tions cho­sen by the em­ploy­ees.

Msipha is se­nior con­sul­tant of Old Mutual Cor­po­rate Con­sul­tants

Romeo Msipha

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