Frequently Asked Questions

Below are some commonly asked Questions “Q” and Answers “A” about umbrella funds and the NMG SmartFund.

Q: What Is An Umbrella Fund?
A: An umbrella fund is a large fund in which multiple and unrelated employers can participate.

Q: What Are The Benefits Of An Umbrella Fund?
A: The benefits of an umbrella fund include:

  • The overall management of the umbrella fund is conducted by a professional board of Trustees, with a Management Committee overseeing the day to day operations on behalf of each participating employer. In this way, members and employers have the benefit of a fund that’s professionally managed on their behalf, with representation from their own Management Committee
  • Umbrella funds have higher adherence to corporate governance principles
  • Umbrella funds relieve the company of the administrative burden and legal issues involved with running a fund
  • Fund costs are reduced, as the costs of fund administration are spread over a larger group of members. Other services provided are similarly competitive as they also enjoy greater economies of scale
  • Investment expertise is structured into the NMG SmartFund which often results in members earning better returns on their retirement savings.

Q. Are Members’ Interests Represented In An Umbrella Fund?
A: Yes. Management Committees have member representatives to specifically represent interests.

Q: How Is The NMG SmartFund Different To Other Umbrella Funds?
A: When selecting an umbrella fund, employers seek a solution with low costs, consistent, professional service and sound administration. Members look for flexibility without having to compromise on advice and support structures as well as receiving speedy and reliable service.

The NMG SmartFund applies expert advice with specialist solutions for both employers and members in the following four key areas:

  1. Flexibility in the choice of investment offerings
  2. Complete flexibility of benefit, contribution and risk benefit design
  3. A choice between your own preferred service providers or NMG’s best house view
  4. A wide array of NMG consulting and administration servicing menus.

Q: Is the NMG SmartFund Independent?
A: Yes. The NMG SmartFund has independent trustees on its board of management, is audited annually by independent auditors and provides participating employers with the choice of any risk benefit provider. Furthermore, independent investment managers are used (depending on the SmartFund options selected by the participating employer and the members).

Q: Is Investment Choice Available To Members?
A: Yes. Although many of the investment options are exercised at the participating employer’s discretion, members can choose to invest in any of the underlying building blocks offered by the SmartFund.

Q: What Investment Portfolios Must I Invest In?
A: Your investment choices will generally depend on the SmartFund options selected by your participating employer. Please refer to the investment handbook for a full explanation of all your investment options.

Q: What Is The Default Investment Strategy?
A: The Lifestage model is the default for most of the investment options and automatically invests members’ benefits into lower equity (share) portfolios as they move closer to retirement.

Q: What Level Of Contributions Do Members and Employers Make?
A: Contribution levels are set by each participating employer and are contained in the member booklet.

Q: What Benefits Are Provided?
A: Benefit levels are set by each participating employer and are contained in the member booklet.

Q: Are Housing Loans Permitted?
A: Housing loans are provided by the SmartFund at the participating employer’s discretion. Please speak to your Company’s Human Resources Department to establish whether this facility is provided.

Q: Are All Fees Disclosed?
A: Yes. All fees such as administration, consulting, investment management fees amongst others charged are fully transparent and are disclosed to each participating employer, member and Management Committee.

Q: What Communication Can Members Expect To Receive?
A: As a member of the NMG SmartFund, you have:

  • Online access to your fund value
  • Regularly updated online benefit statements
  • Annual paper benefit statements
  • A comprehensive member booklet and investment handbook
  • Annual trustee reports
  • Regular fund and investment newsletters as well as investment fact sheets.

Q: Who Is NMG?
A: NMG is the umbrella fund provider

NMG Benefits, the South African subsidiary of the NMG Group – a multinational financial advisory and intermediary services organisation – is a leading provider of employee benefits advice and services in Southern Africa. Our heritage, expertise and financial planning record have positioned us as a leader in the financial services market.

NMG Benefits provides an end-to-end solution across retirement fund, healthcare and financial planning needs of employers and their employees. NMG holds appointments to many blue chip South African organisations and has in excess of 400 staff operating throughout Southern Africa.

With 100,000 retirement fund members and over 200,000 principal members that we consult to on healthcare matters, NMG ranks as a significant player in employee benefits.

Q: Who Administers My Risk Benefits?
A: Risk benefit providers are appointed by each participating employer and Management Committee. Any risk benefit provider can be used in the NMG SmartFund. The default risk benefit provider is the NMG Risk Pools.

Q: Will I Receive Financial Support and Advice in the NMG SmartFund?
A: Yes. NMG has a strong financial planning arm, which focuses on member advice and support. Furthermore, statements on each member’s retirement savings are provided.