What is Orion Namibia Fund?
An umbrella fund is a single retirement fund to which multiple employers belong. Cost benefits arise from economies of scale, risk pooling, etc. It also simplifies the management of retirement benefits for an employer.
Employers can select:
- Pension Fund or Provident Fund
- Specific employer contribution rates for defined groups of employees
- Defined insured death and disability benefits. (Terms and conditions apply.)
- A flexible contribution rate structure
- A wide selection of risk benefits
As the employer, you agree on the total contribution rates in consultation with employees. All contribution rates are defined as percentages of employees’ salaries and include:
- Employee contribution rate (allocated to retirement savings)
- Employer contribution rate allocated to retirement savings (either upfront as a defined rate or the balance of contributions after costs)
- Cost of insured risk benefits selected by the employer Fund, administration and intermediary fees.
- Every month the employer and the employees contribute the defined contribution rates as percentages of the employees’ salaries to the Fund
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- The transfer is tax-free.
- You may make withdrawals from your preservation fund within 3 years of becoming a member of the fund.
- The tax on your lump sum paid on retirement will be dependent on whether you are in the pension fund (tax free) or provident fund (One-third of the total benefit is exempt from tax).
- Disability income benefits: provides an income payable to the member upon disability until normal retirement date, recovery or death – whichever occurs first.
- Lump sum disability benefits: a lump sum is provided on the total and permanent disability of the member.
Before we explain the benefits there are two terms that need to be defined.
NRA – Normal Retirement Age: The NRA ranges from 55 to 65.
NRD - Normal Retirement Date: This may be defined as midnight on the last day of the month during which the member attains the NRA.
Benefits
Early retirement - as a member you can retire early with your employer’s consent providing that it is not more than 10 years prior to the NRD. One month's notice will be required.
Early retirement (ill-health) - as a member you can apply to retire before the NRD due to ill health, provided your employer has received satisfactory medical evidence of ill health that renders you unable to do his or her job.
Late (deferred) retirement - as a member, you can apply to retire on the first day of any month that is after your normal retirement date. Contributions will continue up until such time as your retire.
Note that members can combine the options below subject to tax laws/requirements.
Option 1: preserve your funds
Your withdrawal benefit can be transferred to a preservation fund. A preservation fund allows you to preserve your retirement benefit when you leave your employer, without having to pay tax. It is a specially designed pension or provident fund with a Board of Trustees. The fund is approved by the authorities and run by an assurance or investment company. The advantages are:
Your withdrawal benefit can be transferred tax-free to a retirement annuity fund. You can start receiving a pension any time from the age of 55 onwards.
You also have the option of transferring your benefit to your new employer’s fund, if the new fund allows for this. Depending on the types of funds involved, this transfer may also be tax-free.
Option 2: Take the cash
You can take your withdrawal benefit as a cash lump sum. If you take it in cash, you will pay tax on it. If you don’t reinvest this money, you may find that you don’t have enough saved when you retire.
Disability benefits include: