Member Booklet - UKZN Retirement Fund - University of KwaZulu ...

10.
If you have a normal career progression over thirty years and at least 17.5% of your Fund Salary
has been contributed towards retirement funding during that time (this is based on a total
contribution rate of 22.5% of Fund Salary), the Fund currently aims to provide you with a Net
Replacement Ratio (NRR) of at least 65% of your Final Fund Salary.
Your Net Replacement Ratio (NRR) is the retirement income that you can expect to receive,
shown as a percentage of your final Fund Salary. It can be worked out by dividing your income at
retirement date by your Fund Salary immediately before you retire, and expressing it as a
percentage. A NRR of 65% indicates an initial retirement income of about two thirds of your Fund
Salary prior to retirement.
10.1 PORTFOLIO STRUCTURE
Contributions for members who are under 53 years of age are automatically invested in
Main Portfolio. When you are within seven years of normal retirement you are given a choice
about how you would like your Fund Credit to be invested.
Main Portfolio
The Main Portfolio is currently invested with two asset managers with investment styles that
complement one another. In terms of mandates given by the Fund, the managers are allowed to
vary the proportions invested locally and offshore, and within asset classes (i.e. Shares, Bonds,
Property, Cash etc.) within defined limits and subject to the limitations of Regulation 28 of the
Pensions Fund Act. This Regulation governs the investments of all retirement funds.
In terms of their mandates, the asset managers are permitted to adopt fairly aggressive investment
positions if they see value in doing so, so short-term losses are possible. If you are within seven
years of retirement, you have the option of transferring to portfolios where short-term losses are
less likely.
The Alexander Forbes Lifestage Range
When you are within seven years of your retirement age, you may choose to either leave your
Fund Credit in the Main Portfolio or to transfer your Fund Credit to one or more of the Alexander
Forbes Lifestage portfolios. These portfolios are managed by Investment Solutions. You can
either select your own portfolios or opt to follow one of the Alexander Forbes Lifestage Model
(AFLM), which will automatically adjust your investment portfolios depending on the number of
years you have remaining to your Normal Retirement Date.
Once you turn 53, instead of leaving your Fund Credit in the Main Portfolio, you may
choose to invest in any of the following portfolios.
Alexander Forbes High Growth
Pre-Retirement Options available
Alexander Forbes High/Medium Growth
to members aged 53 and older:
Alexander Forbes Medium Growth
Alexander Forbes Medium/Conservative Growth
Alexander Forbes Conservative Growth
Pre-Retirement Options available Inflation Linked Bond Channel
to members aged 55 and older: Purchasing Power Channel
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