Who manages the LPF?

A board of Trustees manages the LPF, the majority of whom are appointed by the Law Society of South Africa. The General Council of the Bar also apponts one or more Trustees. The Trustees themselves appoint independent trustees who are senior legal practitioners and professional people.

What legislation governs the LPF?

The Pension Funds Act is the main body of legislation governing the retirement fund industry. This Act was drafted in 1956 and has been amended periodically since then. The Act is in the process of being redrafted.

Who is the administrator of the LPF?

The Trustees awarded Alexander Forbes (AF) a contract in 2004 to undertake the administration of the LPF. AF is an award-winning provider of administrative services to retirement funds in South Africa. AF meets the current Black Economic Empowerment rating deemed acceptable by the Trustees. 

What is the Administrator’s fee?

Due to the size of the LPF, the administration fees are more competitive than a single law firm would be able to negotiate. Please contact Alexander Forbes for details.

Which employers participate?

There are 450+ participating attorneys' firms and advocates' groups including the Law Society of South Africa, the statutory provincial law societies, the Attorneys Fidelity Fund, the General Council of the Bar and other legal organisations.

PROVIDENT FUND QUESTIONS

What is a provident fund?

This is a fund that is approved by the Commissioner of Inland Revenue and is registered under the provisions of the Pension Funds Act. The total benefit at retirement may be taken as a cash lump sum.

Who can become an LPF participating employer?

Law firms, legal organisations and advocates’ group can become participating employers.

Who can become a LPF member?

-  Employees of law firms and advocates. Employees include all employees in 
   permanent service
   including office managers, bookkeepers, secretaries, support staff, etc.

-  Partners of legal partnerships

-  Directors of incorporated legal practices

What contributions can be paid?

-  Employer: 5%, 9%, 10%, 12.5% and 15% of Fund salary on behalf of a LPF
   member

-  Employee/director: 0% or 5% of Fund salary

-  For partners, the employer contribution on behlf of the partner is 5% or 10% of Fund
   salary.
   A partner’s “Fund Salary” is defined as, the  all or part of a partner’s proportionate
   share of the profits as declared by the Employer.

What is the definition of Fund Salary?

Fund Salary shall mean, as advised by the Participating Employer, either:

(a) all or part of the member's basic annual salary or wages adjusted on a basis agreed from time to time between the Employer and the Member; or

(b) such percentage of the member’s Total Cost of Employment as is determined by the Employer and notified to the Trustees; or

(c) For partners - all or part of a partner’s proportionate share of the profits as declared by the Employer.

Can additional contributions be paid?

Yes, by either the employer on behalf of the member or by the member. These additional contributions are nominated Rand amounts.

What does “Fund Credit” mean?

A LPF member’s Fund Credit’s represents the total amount of assets held by the LPF in a member’s name, calculated in terms of the rules. It is made up of the following:

-  100% of employer contributions (net of admin fee) plus investment returns plus

-  100% of member contributions plus investment returns

Where can a member find out the amount of his or her Fund Credit?

LPF members can access an interactive website at www.alexanderforbesonline.co.za in order to view values, information, appropriate financial planning tools and relevant educational content to assist them with their financial planning needs.

What are a LPF member’s options on resignation?

A member can withdraw the benefit in cash after paying tax or he can transfer it tax-free to:

-  a provident preservation fund;

-  a retirement annuity;

-  a new employer's pension or provident fund.

What are a LPF member’s options on retirement?

The member can take his Fund Credit as a cash lump sum after tax and invest it as he chooses. Alternatively, the member can convert all or part of his Fund Credit into a monthly annuity/living annuity (pension) through any insurer of choice.

At what age can a LPF member retire?

Normal retirement age is 65 in terms of the LPF Rules, but a member’s retirement from the LPF would coincide with his actual retirement from employment.

Early retirement

A member’s can retire from age 55 onwards, but then the member would have saved for a shorter period of time and would need to live off his Fund Credit for longer than if he had retired later.

Ill-health retirement

The Trustees may agree to an earlier retirement if a member becomes totally disabled but doesn’t qualify for a disability benefit from an insurer.

Late retirement

If the employee's employer agrees, he may be able to work past Normal Retirement Age (age 65). If this is the case, the member will carry on making contributions to the provident fund until he retires.

INVESTMENT QUESTIONS

Do LPF members have a choice of investment portfolios?

Yes, the LPF offers five investment portfolios or the member can choose the New Trustee Default Model - age 65. In this Model, the investment portfolio is determined by the employee’s age. The investment model has been developed to allow for an automatic transfer (switch) of investments from portfolios with more exposure to equities, to portfolios with less exposure to equities as members get closer to retirement age 65. 

The latest Investment returns can be found on the Investment Solutions’ website (www.investment solutions.co.za – under institutional investors).

LPF LIFE COVER

Do all LPF members have life cover?

No, this is an optional benefit per participating employer. Eligible members therefore have cover equal to 0x, 2X, 3X 4X annual salary up to the Free Cover Limit.

Partners and directors can nominate life cover in multiples of R50 000 up to the Free Cover Limit.

Please contact Alexander Forbes for the current value of the Free Cover Limit.

At what age does the member’s life cover fall away?

The cover continues whilst the LPF member is still employed at the employer, until a maximum age of 70.

Who is the Insurer?

Momentum

LPF PERMANENT HEALTH INSURANCE (PHI) DISABILITY BENEFIT

Do all LPF members have disability cover?

No, this benefit is optional per participating employer. The cover falls away at age 65.

When is this benefit paid?

The benefit is paid if the LPF member becomes totally disabled whether permanent or temporary.

Who is the Insurer?

Momentum