We have chosen ITransact as our Linked Investment Service Provider (LISP) platform given the low platform fees and easy of onboarding employers and associated employees. ITransact offers a long list of exchange traded funds and unit trust funds but we understand that it can be difficult to choose from everything that is on offer. To simplify things, we have chosen only 3 funds depending on the age of the applicant when the application is made.

All contributions are invested in ITransact's Retirement Annuity Fund where funds will be invested in one of 3 funds managed by Sygnia depending on the age of the applicant.

PensionX is a financial services provider acting as an intermediary. This means we facilitate the sale of financial products on behalf of one or more product providers. Our business model is built around simplicity and making it as easy as possible for employers to offer their employees a retirement savings plan. To do this we had to find a product provider that would allow us to build a simplified solution on top of their existing technology. ITransact was the ideal partner for us with what we have in mind.

Quoted from ITransact's website:

"Itransact is a South African investment platform which was established in 2011 to address the high fees and costs of investing. Today we are proud to be South Africa’s leading independent low cost investment platform. We believe that investing should be simple and easy, so we do this by eliminating the barriers between different investment product providers with a single low cost investment platform."

You can view their website and a corporate brochure.

PensionX charges an annual fee of 1% excluding VAT.

The fee is calculated on the retirement fund balance and deducted monthly from your ITransact Client Account and paid to PensionX.

When an employee reaches the age of 55, he/she can continue to work but there are some options in terms of what can be done with the funds saved. There are two possible scenarios depending on the amount saved:

i) If the fund value is less than R247,500, the full amount can be withdrawn in cash minus any taxes that will be payable.

ii) If the fund value is more than R247,500, one third of the amount can be withdrawn free of any tax. For example, if the fund value is R300,000, R100,000 can be withdrawn in cash without any tax payable. The remaining balance must be used to buy a living annuity, guaranteed annuity or a combination of the two at an insurance company to provide you with an income in retirement.

All retirement savings made to date will be paid to beneficiaries that the employee would have specified when they signed up for the product. This could be a child or any other family member and so there is no risk of losing this money.

The employer can simply cancel the deduction on their payroll system. A new employer can set up the same deduction with a corresponding payment to ITransact using the employee’s unique ITransact reference number. In other words, any savings made to date will remain in the employee’s retirement plan at ITransact.

Employees can request a balance from us.

We will also send you a statement on a quarterly basis.

This is a question that has been debated at length. An assumption is often made that people should be able to live comfortably with 75% of their pre-retirement salary. Research indicates that saving 17% of pre-tax salary is a reasonable starting point for a 25-year old saver looking to achieve this goal. Quite obviously, the amount increases dramatically if saving only starts at a later age.

Saving 17% (or more if older than 25) of income may not be achievable but it is important to understand that any savings is still worthwhile given the impact compound interest will have over the long term.

This is as simple as asking the employer to change the deduction amount on their payroll system and notifying us.

Yes, we are a registered financial services provider at the FSCA with FSP number 53753.

Contributions will be in a retirement plan and regulations prevent any withdrawals of the amounts saved before the employee reaches the age of 55. This is to provide some form of protection against spending the savings that were earmarked for an income in retirement. See the "What happens when I retire?" question above for some detail on amounts that can be withdrawn at the age of 55.