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First Quarter 2019 – In Touch

jurgens group conference first quarter 2019

Greetings from Mark Jurgens

After the Easter festivities and with the onset of our winter, the season of recovery and preparation, may the few months ahead be mild.

As many may be aware, we are in a historic situation in South Africa. Historic due to the fact that money markets returns’ of around 7% in any bank, have outperformed the average return of 5% on the JSE for the last 5 years. Understandably, most investors are discouraged by the poor returns of our local markets and the thought of switching into a cash or a money market fund is often a consideration.

To highlight the briefly, a few “lessons” for all investors to bear in mind. Inflation is our enemy and it is imperative to earn returns in excess of inflation. Although this has not achieved for a number of years, we believe returns above inflation will be generated for patient investors.

The JSE is currently under-valued and offering the best value of all emerging economies markets. We believe that investors who have been positioned for the long term, will be rewarded.

You need equities in a portfolio. Over long periods, equities have proven to be the best performing asset class and we feel certain that this will continue to be the case in the future. Over the last 5 years, equities have outperformed in international markets.

Investing in cash does not generate real wealth over time, it should merely be used to park funds for short a short period. If one takes the return of cash, after tax is paid on interest earned, the returns at best, are equivalent to the inflation rate. This is not the preferred outcome for investors planning for retirement.

Remember, compounding is a powerful wealth generator and can achieve amazing results.

The price of missing out is high – There are normally only a few days per annum that one needs to be invested in the market to be able to earn those inflation beating returns.

Diversification of portfolio is also essential in that there will be times when offshore equities, property and bonds will perform better than local equities underperforming in the shorter term, is largely due to political instability in South Africa.

I am sympathetic to all investors in South Africa, not only clients of Jurgens Finance. Achieving financial security in these difficult economic times requires sacrifice and self-discipline.

With the elections around the corner, we believe the outcome will have a positive effect on our economy and the lives of all South Africans.

budget 2019

Nothing much has changed when it comes to budget 2019 – Alan Botha

The much-anticipated Budget Speech has come and gone, this year warrant extra attention and politicians grapple with balancing the requirements of building an economically sustainable future for SA, whilst ensuring that voters are kept happy in the lead up to our elections on the 8th May 2019. The budget attracted attention because South Africa’s public sector finances are, after misuse for many years, in the deep trouble. It is key to remember that budgets are not merely technical and will always be politically charged, as this is how “the peoples” money is planned to be spent.

Minister Mboweni could have gone about filling our large budget deficit by slapping additional taxes on both business and high earners. However, we believe  he was mindful that South Africans have hit  a saturation point of how much tax they pay –  a we;;-known study which depicts the “Laffer curve” suggests you can tax citizens up to point. When the average citizens feel taxes are too high, they will circumvent and avoid paying tax to compensate their aggrievement of being over-taxed, this translates into less tax being collected even though the tax rate is higher.

Overall, the budget was market friendly and there definitely seems to be an effort to appease Moody’s rating agency who would be the last to downgrade us to junk status, with a definitive honesty as to the extent of our dire current financial position. State owned companies will be closely monitored going forward fore wasteful expenditure. The cuts to the public service wage bill, through voluntary early retirement and not retrenchment, should assist in alleviating fragile balance sheets at state owned enterprises. Time will tell if this reduction in expenditure will be enforced and then maintained.

Mboweni made mention of some form of privatisation of state-owned companies, which met with a backlash from labour unions, and the fact that he reopened this debate after it being taboo for decades, speaks volumes for trying to fix our fiscus. It remains to be seen, if Eskom was even offered at a price of R1, if anyone would be prepared to buy it.

Other noteworthy points were a proposed grant for first time homeowners to support land reform initiatives and “help people build assets and wealth”. Also, more support for smaller business by giving aid to the Small Enterprise Development Agency to expand incubation programmes for small business, and the expansion of VAT zero-rated items, should all assist in creating jobs and alleviating some more pressure on the poor.

In short, the budget suggested that the way out of this crisis is to reduce the size of government and increase business’s role in the economy.

In our opinion, we are still seeing the same rhetoric around cutting expenditure as being our only tool to get our country’s finances in order, while this is important it does not solve the actual structural problem of ongoing weak economic growth – the track record of cutting expenses has been poor in the past.

We believe by removing some of the red tape around starting and doing business in South Africa, doing a skills analysis of the current workforce, and then transitioning the economy to represent these skills, are imperative to engineer growth and improve our finances. In addition, we would have liked to see more emphasis on savings and incentives to encourage more savings from both personal and government standpoint, this would lead growth, increasing wealth, new business opportunities, etc, with the impact of improving the lives off all citizens of South Africa.

Short Term News Update – Greg Brits

Load shedding is “a burden on individuals and business alike”. However, with adequate planning, its impact can be minimised. On the bright side, it disconnects us from the world for a while and affords us more quality time with our loved ones.

To avoid incidents which could be caused at such times, it is vitally important to unplug or switch off ALL appliances that were being used before the power outage to prevent them turning on unattended when the power is restored. In doing this you will also protect these items from electricity spikes or surges. Ensure fire safety, save lives and save property!

A few points from our insurers to implement to minimize load-shedding inconvenience and security breaches:

  • Keep a few high-wattage solar powered lights for your garden, and a few LED lights for inside. Lights is a deterrent to would-be burglars.
  • Make a habit of keeping cell-phones and a portable phone charger charged.
  • Have someone with you at your gates should you need to manually open and close them – or arrange with your security company.
  • Use non-power dependant devices for extra security i.e. padlocks, burglar bars and deadbolts. Ensure back-up batteries on automated systems are in good order.
  • Keep a load-shedding schedule handy beforehand preparation together with a torch or a solar battery-powered light that is charged – have spare batteries available.
  • Fridges and freezers contents should keep overnight – avoid opening repeatedly. 
  • A generator, battery system, solar panels or combination of these, is a wise investment.

Staff news

Staff Conference - Jurgens Group Staff Conference was held on 7 February with the theme “Back to the Future”.

Jurgens Group celebrates its 30th anniversary this year and staff enjoyed a 1980’s dress up function.

jurgens group conference first quarter 2019

Awards

Kim Boshoff who is a member of the Jurgens Insurance Brokers team was awarded the Achiever Award 2018. Congratulations Kim!
Jurgens group awards first quarter 2019
Other Award winners at the Jurgens Conference were:
  • Kim Wright – 10 Year Service Award
  • Lorraine Else – 10 Year Service Award
  • Patience Mashinini – 5 Year Service Award
  • Philippa Blair – 5 Year Service Award
    • Posted on

    Second Quarter 2017 – In Touch

    mark jurgens at Tesla

    On a recent trip t the USA, Mark Jurgens was part of a South African contingent of invited financial advisors.

    One of many of the blue-chip companies visited was the Tesla Factory in Fremont, California.

    This is one of the world’s most advanced automotive plants.

    jurgens group Andrea

    Andrea Collins joined Jurgens Group last year.  Her experience and efficient work-ethic

    makes Andrea an asset to the Jurgens life and investment administration team.

     

    Message from Mark

    It seems like only yesterday that we were discussing hot weather and drought warnings – now we are thankfully no longer experiencing a drought (in Gauteng at least) and we are all reaching for our winter woolies and heaters!

    I have recently returned from an investment business trip to the USA where I was fortunate enough to meet with various global companies.  These included a couple of investment companies, banks, as well as IT companies such as Google, Microsoft and Amazon.  The IT industry is growing at a rapid pace and the growth opportunities are abundant.  Their modern approach to office life and young start-up business was a true eye opener.  Our emerging youth have opportunities available to them that many of us have not yet begun to contemplate – an arena well worth researching!

    Back on the home front, many of you are aware that we have allocated a generous portion of your investment portfolios to offshore investment opportunities.  This has been essential due to the political uncertainty over the last two years.

    Year to date, the market is performing better than it has over recent years.  The R/USD exchange rate has a larger effect on investment returns than most people realize and our downgrade negatives may only be realised a few years down the line, as well as the possible implications of state capture.

    To reiterate, the most important thing an investor can do in these uncertain times is remain calm, stick to their long-term investment plan and not make hasty decisions.

    It is important to mention that all portfolios are managed on a daily basis. The relevant fund managers of the various companies, make adjustments within the funds, to counter-act the effects of our ever-changing economic environment.

    There is a saying that “Winter is the season for recovery and preparation” – may this winter be just that!

    Regards,

    Mark

    The State of your Estate by Alan Botha

    Taking an active approach to estate planning is critical, as it involves the alignment of estate planning instruments for a client’s benefit during their lifetime. A further consideration, is the benefit to the ultimate beneficiaries, which also requires adjustment from time to time due to changing personal needs and regulations.

    There are four Estates that one must deal with in the estate planning process:

    • A client’s personal assets (these will be dealt with in their Will)
    • Trust assets (To be dealt with by the Trustees of the Trust according to Trust Deed).
    • Contractual arrangements such as life assurance proceeds and buy-and sell agreements (to be paid out to a nominated beneficiary or to the surviving business partners)
    • Retirement fund benefits. (The Pension Funds Act regulates these while you are a member of the fund. If you elect a living annuity after retirement, you will be able to nominate a beneficiary for such proceeds.

    In addition to having four ‘Estates to consider’, life is not simple, and things change along the way – both good and bad. Estate planning must take these events (and potential events) into account and be flexible enough to meet your changing needs.

    The following questions are fundamental to good Estate planning outcomes:

    Do you have a strategic Estate plan in place? Do you have a plan in place that takes the ‘4 Estates’ and your personal requirements into account? Does the plan meet the long-term wishes you hold for your Estate? Is the plan flexible enough to allow you to change the structure should your circumstances change?

    Do you have a signed and up-to-date will? This is the pivotal point of successful Estate planning – your plan may collapse without it. A Will must express your wishes, be valid, signed, and up-to-date.

    If you have assets offshore, you can have a foreign Will in addition to a South African Will, or one Will dealing with both your local and foreign assets.

    Have you used the R3.5m abatement to best effect? Each Estate is entitled to a deduction of R3 500 000. For spouses, the unused portion of the R3.5m abatement amount will ‘roll over’ to the surviving spouse’s Estate if not used.

    Is ‘my’ family Trust at risk? Often in family Trust situations, risks are ignored and misunderstood. The control, ownership and benefits become so mixed up, that there is no Trust, the risk of which exists that the Trust assets vest in the ‘client’. This reduces the benefits of having a Trust as an instrument in Estate planning.

    Are my Buy & Sell agreements going to protect my family? Research shows that 75% of Buy & Sell agreements don’t work to the benefit of the client. Typical problems include agreements not properly signed, agreements in conflict with a client’s Will, or in-community of property marriages not considered.

    Are my policy beneficiary nominations up to date? It’s important to note that nominating a beneficiary can save on executor’s fees but won’t save on estate duty (as the policy still forms part of the estate).

    Have I made sufficient provision for liquidity? An Estate Plan should also provide for liquidity for winding up expenses, to prevent dependants having to sell off assets to meet these expenses. A Life assurance policy is a reliable and convenient way to provide for liquidity within the Estate.

    How will my retirement fund benefits be dealt with? Source Allan Gray

    jurgens group chart

    Will my family know what to do in the event of my death? Ensure that you, your spouse and family build a relationship with your financial adviser, who can assist with the financial intricacies at the time of loss of a family member. Also make sure that your family knows where to access a copy of your Will. The team at Jurgens Finance are well equipped and ready to assist in all estate planning considerations.

    Short Term News Update from Greg Brits – Cyberattacks

    In May this year, the world at large woke up to a very scary reality – we are all vulnerable to ransomware and other cyber-attacks, either directly in our personal capacity or indirectly through the services to which we rely upon daily.

    Friday the 12th of May saw over 100,000 computers in over 70 countries hit by a strain of ransomware known as Wcry or WannaCry. A pop-up will then appear on the victim’s computer’s screen demanding a ransom of $300 in Bitcoin within three days. Failure to comply will result in the price doubling and after seven days, WannaCry will render the data permanently irretrievable.

    Bitcoin is an online currency infamous for its anonymity and preferential status as a medium of exchange amongst black-market traders. While companies might be able to afford $300 to get their crucial information back, individuals in their personal capacity can hardly afford to do this – and there’s no guarantee of encryption release.

    Through some intervention by a security researcher, the ransomware was prevented from replicating itself. Whilst infected computers remained encrypted, this stopped the further spread of the malware. By then over 126,000 computers in 104 countries (with more than half of the infection reports coming from Russia). However, this only managed to stop a single strain of the virus and as predicted, WannaCry 2.0 hit the web shortly after the initial victory.

    By Sunday morning on 14 May, the latest count showed over 200,000 victims in at least 150 countries – most of those victims being businesses.  Fortunately, a “patch” was created and could be downloaded for free, effectively blocking variants of WannaCry from infecting your computer.

    Cyber Risks insurance is set to be a challenge for insurers – a risk which may prove to be the hailstorm of the cyber world crashing down on a global scale to put a dent in our day. Jurgens Group, in conjunction with various product suppliers, is well positioned in the cyber risks market and offers a comprehensive policy for this type of cover. Please contact Jurgens Insurance Brokers for further information.

    Source: Extracts from Camargue Liability Management

     

    Quote of the day……

    ” It is not the strongest of the species that survives, nor the most intelligent that survives.

    It is the one that is most adaptable to change”  Charles Dawin

     

    Services offered by Jurgens Group:

    Investments – Local & Offshore   –    Financial Advice  –

    Life Assurance   –  Medical Insurance    –   Employee Benefits    –

    Personal & Business   –   Short Term Insurance

     

    Jurgens Group                                                                                       Jurgens Group

    Jurgens Finance House                                                                       Jurgens Finance House

    15 Bradford Road                                                                                   P O Box 75470,

    Bedfordview                                                                                           Gardenview, 2047

    2007

    FSP Number: 732 and 7980   Reg. No. 2012/138938/07    

    Tel:  (011) 622-2061/2/3    Fax:  (011) 616-6673  

    Posted on

    Second Quarter 2016 – In Touch

    Good day to all! Our weather may be mild,… unlike the financial environment! Despite the six-month reprieve from being cut to junk status, we are not yet out of the woods and over the next six months we still need to practice cautious spending and disciplined saving.

     

    Second Quarter – In Touch

    Second Quarter 2016

    In Touch

    investment news for you

    jurgens group signage

    Jurgens Group new look signage at the entrance

    15 Bradford Road, Bedfordview

    Good day to all!

    Our weather may be mild,… unlike the financial environment! Despite the six-month reprieve from being cut to junk status, we are not yet out of the woods and over the next six months we still need to practice cautious spending and disciplined saving.

    As you are all aware, local and international economies are under-performing and experiencing poor growth. At times like these, I caution you with regard to unnecessary financial commitments. One should seriously consider the necessity of any withdrawals from investment portfolios during this time. Although the withdrawal may seem slight, the long-term effects are significant and will invariably have negative effects at retirement age. For many, retirement age is no longer 65 years of age, but closer to 70 years of age.

    In the last year, offshore investment demand has increased. This opportunity has proven difficult for many clients in the past due to the high minimum lump-sum investment requirement.

    There is now a new product on the market which allows for overseas investment on a monthly debit order basis. This debit order is paid in Rands and converted to Dollars. Should you require any details on this product, please contact us and we can provide further information.

    Hopefully our crisp winter weather will keep the spirits up and the flu bugs at bay!

    Regards,

    Mark

    Updating of Risk Benefit requirements

    We are currently upgrading our Risk Benefit client policy information. Please would you inform us of any changes to your occupation, income, education and smoker status. Any changes should be communicated to Andrea Geuthner at our offices.

    The objective of updating any changes, is to give our clients the opportunity of improved risk benefits and cover at reduced premium rates if possible, more in line with current personal circumstances. In accordance with tax changes made to the Income Protection benefit, this too may need realigning. Changing your benefits from Accelerated to Stand Alone, is another possible option being considered. Over time, Life companies make changes and offer enhancements to risk benefits and this may be a good time to review one’s client’s ever-changing risk needs.

    Please contact our office should you wish to review your policy schedule.

    Medical Aid – Jeanene Swanepoel

    Medical Aid Schemes have the right to suspend membership – main member and dependants – on the following grounds:

     

    • A member fails to pay the contribution, within the time allowed in the medical scheme’s rules;

    • Failure to pay any debt due to the medical scheme;

    • Not paying the full amount due each month;

    • Submission of fraudulent claims;

    • Committing any fraudulent act (buying toiletries on medical card);

    • Non-disclosure of health status (past and present);

    • The medical scheme has the right to suspend member’s membership or that of his/her dependants, without prior notice to the member.

     

    Surplus funds remaining in your Medical Aid Savings Accounts (MSA) at the end of the calendar year, are automatically carried over to the following year’s MSA.

    When terminating your membership, your MSA is transferable to a new scheme, provided that your new plan has a medical savings account.

    Should the member’s new Medical Aid scheme plan not have a savings component, the surplus funds from your previous scheme is due to the member.

    Short Term News from Greg Brits

    The principal of insurance is based on an event taking place that is sudden and unforeseen.

    The challenge is though, for example, in a case where a concealed water pipe begins to leak due to rust deterioration over many years and is unbeknown to the insured. Maintenance or replacement of this leaking pipe was unforeseen, yet this type of event would not be covered by any insurance policy. This scenario is seen as gradual deterioration or wear and tear. Should the leak have caused water-damage to furniture or carpets, a claim for such damage, would be covered by your policy.

    I have in a previous newsletter mentioned that Valuators can be arranged to have our client’s buildings valuated. There has been some concern shown by clients, that such valuations seem too high.

    We have been assured that these values are in line with current building costs. Please bear in mind that the insurers base the replacement value of a building, on new-build costs. Many clients assume that the replacement value would be that of the selling or purchase price of the building or home.

    In the event of a fire and the total loss of a building or home occurs, the insured may be very surprised when confronted by the actual costs to re-build “like for like” prior to the loss.

    That is why we recommend that a thorough valuation be done to ensure that buildings and homes are adequately insured to avoid the insurer short-paying your claim.

    Please contact our office so that we can assist with making these arrangements.

    Vehicle remote jamming is on the increase! A friendly reminder, to please ensure that your vehicle has been securely locked by testing the handle. Any items left in your vehicle while it is unattended, should be locked in the boot or compartment where these are not visible to passers-by.

    Tax Amnesty or an Exchange Control Amnesty

    Source courtesy of: Financial Mail 26 May 2016

    The latest version is the special voluntary disclosure programme (VDP) which is different from SARS’ ongoing voluntary disclosure programme. It is a chance for noncompliant taxpayers to disclose their offshore assets and income.

    The incentive to do this instead of waiting for another “final, final” amnesty is that a new global standard for the automatic exchange of information between authorities is being introduced next year.

    There will be one joint process involving both SARS and the Reserve Bank, so that both noncompliance with tax and exchange control contraventions, can be assessed together.

    Applications will have to be made between 1 October 2016 and 31 March 2017. Trusts do not qualify for the programme, nor do people who have a pending audit or investigation in respect of their foreign assets or taxes. Relief is not very generous. Half of the money used to buy the offshore asset is taxed, as are all investment returns which accrued after 1 March 2010, and interest on tax debts will start to accrue only from that date. One benefit is that anyone who is accepted in the programme will be exempt from criminal prosecution.

    When it comes to exchange controls, SA residents will be allowed to disclose and regularise their contraventions. There will be a levy of 5% of their unauthorised foreign assets in the event the funds are repatriated to SA and a levy of 10% if the assets are kept offshore.

    Staff News

    jurgens group miguel

    Miguel Araujo joined Jurgens Group in May 2015 as a Financial Advisor. He started his financial planning career with Liberty Life’s Franchise Division for young graduates and in his first year, was awarded “The Chairman’s Young Financial Advisor of the Year Award”.

    Being of Portuguese decent, he is a huge fan of football… and food. He enjoys travelling with family and friends and Thailand is definitely one of his favourite destinations.

    Quote of the day

    ” If my mind can conceive it,

    and my heart can believe it –

    then I can achieve it”

    Muhammad Ali

    Services offered by Jurgens Group:

    Investments – Local & Offshore – Financial Advice – Life Assurance – Medical Aid – Employee Benefits – Personal & Business – Short Term Insurance

    Posted on

    Fourth Quarter 2015 – In Touch

    Hello to you all….

    Yet again, the year has flown by and we find ourselves in November – I like to think it is not age that makes time seem to go faster, but rather that we are all so busy that we no longer make time to stand still and savour the moments!

    Reflecting on some of the years’ events, a few stood out more than others:

    Who would have imagined that Cuba and the USA would finally end fifty-four years of hostility, and that we would see the Pope meeting with Raúl Castro in Cuba?

    After a period of seventeen months, there was finally some debris from Malaysia Flight 370 washed up on the shores of Reunion island – a great discovery for the families awaiting answers and some form of closure.

    Having been fortunate enough to visit Japan this year; the 70th anniversary of the 2nd World War bombing of Hiroshima was very pertinent and moving.

    Not only do we see regular pictures of Mars, but they have also discovered that there is liquid water on Mars.

    Geologists the world over are loving South Africa and our buried treasures!

    And lastly, who would have imagined that the trusted VW brand would be involved in the rigging of diesel emission tests?

    These are but a few of the interesting events that occurred during this year.

    It is unfortunate that stock markets – both local and international – have performed poorly this year. Uncertainty regarding the Chinese economy, Greek volatility, and interest rate decisions in the USA, has caused global instability.

    This year our Rand has also depreciated significantly, but has not performed as badly as many other emerging market currencies.

    Fortunately, a number of Unit Trust managers used the volatility to their advantage. Their foresight prevented losses and resulted in our cautious and moderately invested clients achieving returns in excess of bank investments.

    At times like these, one needs to tread cautiously before making any financial commitments.

    On a positive note, most medical aid companies have announced single digit increases for 2016.

    On behalf of all the staff at Jurgens Finance, I’d like to take this opportunity of thanking you for your continued support, which is very much appreciated.

    I wish you and your families a happy and peaceful Festive Season and a profitable 2016.

    Regards

    Mark

     

    Short Term News … from Greg Brits  

    It’s that time of the year again and not too many days to Christmas. Some of you may be going away so we will do our usual checklist to help prevent any losses while you are away.

    Santam the industry’s largest short term insurer have released the following crime statistics for the 2014/2015 year –

    ·      A 21% increase in reported commercial vehicle hijacking claims.

    ·      A 21% increase in reported household robbery claims (theft by use of force or violence).

    ·      A 19% decrease in domestic house breaking claims (breaking and entering a property).

    ·      A 13% decrease in the theft of private vehicles.

    ·      A 13% increase in reported business robbery claims.

    ·      A 4% decrease in reported commercial vehicle theft claims.

    The above stats are a concern so we must continue to be vigilant.

    Insurers are taking a stance that if there is a lack of maintenance resultant damage will not be covered. As an example, should rain cause damage to the ceiling due to the roof not being maintained, the resultant damage to the celling will not be covered. Please have your roof inspected to see that there are no cracks or cement that has perished from the elements that can cause leaks, and renew any water proofing at least once a year.

    Checklist while you are away:

    Switch main water supply off if your house is totally unoccupied to prevent flood damage.

    Test your alarm system to see if it is in good working order.

    Lock main gate if possible as thieves tend to force these open.

    Get a friend or neighbour to clear the pavement of markers and newspapers from Post Boxes.

    Have timers or day / night switches installed to have lights come on at night.

    Switch off geysers to save electricity.

    Check to see that you have the correct cover in place.

    Have our number handy should an unfortunate event occur. Our office does not close over the festive season.

    Once you have completed the above go and enjoy a well-deserved break.

    We would like to wish you a Merry Christmas and a Blessed New Year.

    Life – Buy And Sell Agreements

    A business needs to prepare for the event of one or more of the partners dying or becoming disabled. Putting a buy and sell agreement in place, can ensure a smooth transfer of shareholding between partners. This guarantees continuity for the business and peace of mind for the deceased or disabled partner and their family.

    Traditionally, a life insurance policy is used to fund the sale and purchase of the shares or member’s interest. It is important that the policy be structured correctly to sufficiently cover the actual market value of the shares or member’s interest being purchased.

    It is most important to note that the agreement will only be valid if the registered owners of the shares / member’s interest sign the agreement in the presence of witnesses. Be careful of in-community-of-property marriages, as the spouse will also have to sign the agreement. Many agreements fail because not all the parties have signed the agreement or have signed it incorrectly. Contact our office should you require assistance in concluding these agreements.

    Employee Benefits – Estelle Susanna

    This year has definitely been a less tempestuous year for the Employee Benefits Industry to say the least.  We haven’t had tax reforms or pension fund reforms that were on again off again, the whole industry has taken on a wait and see attitude.  If Cosatu allow the previous reforms effective 1 March 2015 to go ahead, they will be effective 1 March 2016.

    A reminder – Provident funds to be replaced by Pension funds for member’s under 55, member’s will withdraw one third cash at retirement and purchase an annuity with the two thirds.  Contribution levels to increase to a maximum of 27.5%, capped at R350,000.

    Wishing you a Blessed Festive Season and looking forward to being of service to you in the New Year.

    Discovery Health – Introducing the Smart Plan

    The latest in digital technology meets the best in healthcare as Discovery Health Medical scheme provides members with new access points into the health care system. The Smart Plan will be a fully digital experience, where members will be guided intuitively to the most appropriate healthcare providers, ensuring better health care journeys at the lowest possible cost. The Smart plan is the ultimate manifestation of a more effective Discovery Health system.

    The most important aspect of this Smart Plan is that it provides members with unlimited GP consultations in the Smart Plan Network, with a R50 co-payment that applies for each visit. The balance of the consultation fee will be covered up to the Discovery Health Rate.

    Members enjoy full cover for a defined list of acute medicine prescribed by a Smart Plan network GP, subject to a co-payment of R10 per item on the prescription. Prescription medicine must be dispensed at Clicks or Dis-Chem.

    The Smart Plan provides full cover for all Chronic Disease List conditions as per the prescribed formulary list when using MedXpress, Clicks or Dis-Chem.

    For more information please contact Simone Heyman by email to simoneh@jg.co.za or call Discovery on 0860 99 88 77.
    Posted on

    First Quarter 2015 – In Touch

    Our annual Jurgens conference took place in Magaliesburg this year which was most enjoyable and a great motivational, team- building experience.

    A question I am often asked is “How safe is your unit trust money?”

    In a nutshell, to invest in unit trusts, your investment is regulated by law. Although these regulations cannot protect investors against market corrections or crashes, there are key role players put in place, making it very difficult for any one of the parties to disappear with your money.

    The key role players are:

    The Trustee is an independent Bank or financial institution appointed by the unit trust management company to safeguard the assets of the unit trust. The manager and trustee set up a unit trust together. The Trustee ensures the fund is managed according to the rules of the mandate and the Collective Investment Schemes Control Act.

    The Financial Services Board (FSB) is the regulator of the unit trust industry and issues a licence to approved unit trust fund managers. The FSB has the power to request audits and the manager needs to submit regular reports to the FSB.

    The Collective Investment Schemes Control Act (CISCA) regulates the way in which a unit trust should be managed and what information needs to be disclosed to investors. CISCA also limits exposure to any one holding or certain asset classes. The potential for your investment to be affected by fraud is thus curbed substantially when investing in unit trusts. If a company in which you are invested fails to adhere to any of the legislated regulations, this will have a limited impact on your total investment.

    (Courtesy: Sanlam Investments, News and Insights)

    Regards

    Mark

    Employee Benefits from Estelle Susanna

    Tax changes that will have an impact on disability income policies effective 1 March 2015

    A reminder : Effective 1 March 2012, all unapproved risk contributions are to be taxed as a Fringe Benefit in the hands of the employee.

    The Income Disability contribution was then tax deductible by the employee, making the contribution tax neutral. The Income Disability benefit received was taxed.

    With effect from 1 March 2015, the Income Disability contribution will continue to be taxed as a Fringe benefit and the employee cannot claim back the tax. All Income Disability, either new or existing claims, will be paid out tax free. This applies to Employee Benefits and privately owned Income Disability policies.

    Inflation and the oil price from Chris Botha

    Inflation slowed to its lowest rate since April 2011 at 4.4% in January compared to a year ago, as lower fuel prices and slower increases in food inflation offered relief.

    The inflation data supports the case for stable interest rates for at least the next few months, which will offer over indebted consumers some respite.

    The 4.4% also means inflation began the year well within the 3%-6% target band.

    The Reserve Bank said in January it expected inflation to remain within the band.

    Oil prices reached $115 a barrel in the middle of last year and fell to about $45 later in the year and in January, to about $62 a barrel.

    Food inflation will play a role in how inflation performs in future. Annual food inflation moderated from 7.4% in December last year to 6.6% in January 2015.

    Courtesy: Business Day

    Short Term News from Greg Brits

    The effects of load shedding has brought about more and varied claims for the insurance industry.
    Consumers are encouraged to remain vigilant in order to ensure that resulting claims will be covered by their insurance policies. Load shedding has become part of our daily lives and may be so for at least the next 3 to 5 years.

    Where insurance cover is subject to a burglar alarm warranty, and the alarm fails due to load shedding, should a loss occur during that load shedding period, the insurers have advised that they will deal with each case on its own merits.

    If an alarm failure was solely due to load shedding, a client will not be prejudiced by that failure which is beyond their control. It is, however, expected that the insured will at all times act in a reasonable manner by ensuring that the alarm is activated and that the alarm back-up battery systems are fully functional and tested regularly.

    To help our clients understand and protect themselves from risks that involves load shedding, the following precautionary measures should be followed:

    • Check and replace old batteries of alarm systems, electric gates etc to ensure that they are functioning and are able to sustain the power source during periods of load shedding.
    • Arm your alarm if you leave your residence, even if load shedding is expected. Should it malfunction during load shedding, you may have to prove that your alarm was in good working order at the time you left your premises for the insurer to consider your claim.
    • Switch off and disconnect all electrical appliances when load shedding occurs or when leaving the premises. This will avoid power surge damage when power is restored (except for fridges, of course).
    • Where possible, install a power surge protector to reduce the risk of damage to electrical appliances and DB boards.
    • Should you install a generator, please ensure that it is installed by a qualified electrician and that the relevant and compliant change over switches are used.
    • Connecting a generator direct to a plug point could have disastrous consequences, one being a fire hazard! This type of claim will usually be rejected by the insurer.
    • Power Surge cover is usually limited to a certain amount on insurance policies.
    • The risk of burglaries and armed robberies are higher during load shedding, be vigilant and keep security gates locked.

    In terms of alarm warranties and how your insurer will handle a claim due to load shedding, please contact our office.