Employee schemes

Corporate Business offers two types of pension schemes, which are:

• Defined Contribution Schemes
• Defined Benefit Schemes

Defined Contribution Schemes: Under this scheme, an employee and employer contribute a defined percentage of the member's earnings. The joint contributions are invested under the pension fund and, when the member retires, the contributions paid together with investment earnings are used to purchase an annuity.

Defined Benefit Schemes: This is also referred to as the "final salary scheme". Under this scheme, an employee receives, on retirement, a pension based on a percentage of the salary earned on or towards his or her retirement date for each year of either service or scheme membership. The percentage is normally stated in the pension scheme Rules or provisions.

Owing to the benefits promised to retiring members, as defined in the scheme provisions, a Defined Benefit Scheme is required to undergo regular actuarial investigations. Such investigations serve to establish the scheme's financial position in relation to benefits in respect of service accrued to the actuarial valuation date and the rate at which contributions should be set aside to meet the cost of benefits accruing in respect of future service from the actuarial investigation date.

Group Life Assurance benefit is designed to cushion an employee’s family in the unfortunate event of death or upon disability before retirement from employment. The benefit is offered either as ancillary to a pension scheme or as an independent scheme. Benefits are usually payable to beneficiaries as lump sums.

GLA cover is set as a defined multiple of an employee’s annual salary. The benefit is a tax-free lump sum payable to the dependents of a deceased employee. Usually, the employer meets the costs of the GLA cover as part of employees’ benefits.

Generous conditions are available to facilitate cover for all employees. These include no waiting period and cover up to a defined limit which is open to all employees with no questions asked besides proof of employment.

Supplementary benefits to Group Life Assurance (GLA) cover:

• Disability Benefit – This is a lump sum benefit equal to the basic GLA cover payable on total and permanent disability. It assists a disabled employee to cope with the financial costs associated with disability, given that the employee can no longer continue working.
• Accident Cover – An additional amount is paid if death is due to an accident.
• Group Cash Funeral Cover – The Group Funeral Assurance comes as a rider to the Group Life Assurance Scheme and is not mandatory. It is paid as a multiple of salary or a flat amount.

The ZB Scholars Combo is a two-in-one Group Life Assurance (GLA) education protection Scheme that provides school fees and accidental cover to students enrolled at a school or college.

Key Benefits

1. Scholar’s School Fees Cover

• The benefit pays outstanding tuition fees for a student enrolled at a school or college on the death of the student’s guardian or parent.
• The outstanding tuition fees are paid until the end of the education level for the scholar, for example, until Grade Seven (7) for primary education or until Form Six (6) for secondary education.
• The outstanding fees are paid directly to the school by ZB Life at the beginning of each school term or semester.

2. Scholar’s Accident Cover

• The benefit provides for a cash payment to a student when he or she is hospitalised, disabled or dies as a result of an accident happening during school activities.
• The cash benefits are provided in multiples of US$500 up to a maximum of US$5,000, with corresponding affordable premium contributions.
• The cash benefits are paid per student as follows:
  • Accidental Death Benefit – 100% of the cash benefit.
  • Personal Disability – 50% of the Accidental Death Benefit.
  • Hospitalisation Benefit – 10% of the Accidental Death Benefit.

Key Features

• The Scholars Combo Scheme is targeted at schools or colleges seeking to provide cover to their students and enhance their reputation.
• The school or college is regarded as the Scheme Owner or Policyholder.
• Membership is compulsory for all students enrolled at the school or college that subscribes to the Scheme.
• The Scheme provides immediate cover after payment of the first premium.

The Group Cash Funeral Scheme is a group insured benefit that provides a basic cash benefit payable on the death of an employee or the employee’s nominated dependents. The benefit assists with the financing of funeral and other related costs.

However, families may face additional obligations after a burial. These include memorial and tombstone unveiling functions, as well as ongoing financial commitments such as school fees.

The Scheme therefore also offers the following optional benefits:

• Memorial Cash Benefit
• Tombstone Cash Benefit
• Grocery Benefit
• School Fees Benefit
• Personal Accident Benefit
• Premium Waiver Benefit

The Group Hospital Cash Plan (GHCP) is a group-insured benefit that provides protection against unexpected hospitalization costs. The Scheme is offered either as ancillary to a Pension Scheme or Group Life Assurance Scheme, or as an independent scheme.

The Plan avails a pre-determined sum of money for each day spent in hospital by a member or his/her registered dependents once a hospital stay exceeds 48 hours.

• A member is allowed to register up to eight (8) dependents. Dependents can be registered at any time.
• A member can select the required daily hospital benefit for himself/herself and the registered dependents.
• A member is free to use the daily hospital benefit as he/she deems fit. For example, the funds could be used to finance medical aid shortfalls. They could also be used to replace, in whole or in part, income lost as a result of hospitalization.
• The GHCP is available to any organised group such as church members or employees of a company. The Scheme should have a minimum of 50 members.

The Schemes are designed to provide protection against loans and mortgages. They provide Life Cover in the event that the life insured or borrower is unable to repay the loan due to death.

The Schemes therefore provide relief funds to offset loan or mortgage indebtedness, thereby reducing the risk of attachment of property.

ZB Life offers investment vehicles for pension contributions. The vehicles offered are tailored to match clients' liability profiles, strategic preferences and statutory requirements on a continuously reviewed basis. The funds have been able to provide clients with inflation-beating real returns.

The investment vehicles offered include:

• The Deposit Administration Fund
• Market Linked Investment Fund
• Segregated Investment Fund
• Umbrella Fund

The Deposit Administration Fund – The Deposit Administration Fund is a pooled investment fund which provides guarantees on contributions credited to an employee’s pension account. Bonuses are declared every year based on investment performance.

The fund reduces volatility in investment performance through a smoothing mechanism. Cumulative investment returns earned on the Deposit Administration Fund were the highest in the market from 2009 when the economy dollarized.

Market Linked Investment Fund – As an alternative, pension contributions can be invested in our pooled market-linked investment fund, which is called the GrowthPlus Fund.

This is actively managed, with participants being credited or debited with investment surpluses or losses depending on the performance of the underlying investments. While this fund has the potential to generate high investment returns, it also carries a high risk of investment losses. It is therefore only recommended when a pension fund has built up sufficient capacity to withstand temporary investment setbacks.

Segregated Investment Fund – The third investment option is a Segregated Investment Fund. This is an arrangement whereby a separate and stand-alone investment fund is created for the pension scheme.

The Trustees of the pension scheme will decide the nature of the investments, with ZB Life offering investment advice to assist the Trustees. The Fund will carry the full investment risk and is therefore subject to fluctuations.

This structure is recommended for large to medium-sized schemes that have the capacity to invest in a diversified portfolio.