What exactly will change for Sanlam employees?

Contributions

Your contributions to the fund will stay on the current rand amount.

Tax deductibility

• The employer contribution will be taxed as a fringe benefit, but you may deduct contributions up to 27,5% of the greater of your remuneration or taxable income for tax purposes. Because the fringe benefit tax will be offset against the tax deduction, your salary will not be affected by it.
• The tax-deductible contributions of high-income earners will be further capped, which means if the 27,5% mentioned above exceeds R350 000, no more than R350 000 of your contributions may be used to reduce your tax. This includes contributions to all pension, provident and retirement annuity funds which you contribute to.
• Please note: The full deduction will be made from your income – however, you will only qualify for a tax deduction up to R350 000 for that specific year. A separate communication to affected members will be sent out early in 2015.
• If your contributions in a specific tax year exceed R350 000, you will be able to deduct the balance (the contributions more than R350 000) in the following tax years or it will form part of your tax-free portion at retirement.