About YX Employee Benefit Fund

1. What is the YX Employee Benefit Fund?

The YX Employee Benefit Fund specialise in providing group benefits for software development professionals. It operates as a defined contribution fund. In this type of fund, a member’s fund credit is determined by their contributions, employer contributions, and investment returns, minus applicable costs. The YX Employee Benefit Fund is an accredited retirement fund specifically designed for independent software development houses and their employees.

The Fund offers different membership categories based on contribution structures:

Category A (2% Fund):

Members contribute 2% and the employer contributes 2% of the pensionable salary. This category is a supplementary retirement savings vehicle.

Category C (Retirement Fund):

This is the main retirement savings category, where members contribute between 7.5% and 9%, and employers contribute 18% of the pensionable salary, depending on service conditions.

2. Why Does This Fund Exist?

The core purpose of the YX Employee Benefit Fund is to make a meaningful impact in the lives of its members, their families, and their communities, both today and in the future.

As a defined contribution fund, its primary function is to provide a Retirement Savings Plan. The YX Employee Benefit Fund centers its strategies, decisions, and behaviours around its members. This focus is encapsulated in its 2025 theme: "Empower, Evolve, Excel," reflecting its commitment to empowering members and evolving with their needs.

The Fund also exists to manage and pay out various benefits, including retirement, withdrawal, death, disability, and funeral benefits.

3. Who Are Members of This Fund?

Membership of the YX Employee Benefit Fund is open to software development professionals employed by Software Development Houses in South Africa. The YX Employee Benefit Fund serves over 100,000 of these individuals. They are accredited as a retirement fund for all employees of software development houses.

Former members, beneficiaries, and dependents who previously worked in software development and contributed to the YX Employee Benefit Fund are encouraged to check if they are entitled to unclaimed benefits if they did not receive a payment after resignation, retirement, or dismissal.

4. Why Is It Beneficial to Be a Member of the Fund?

Being a member of the YX Employee Benefit Fund offers several key advantages that make it the "fund of choice" in the software development industry:

Financial Performance:

The YX Employee Benefit Fund maintains an excellent long-term investment performance track record. This performance is on par with the best global balanced managed portfolios in South Africa and is ahead of its peers.

Low Costs:

The Fund prides itself on having administration costs that are among the lowest in the industry. This cost efficiency ensures that a larger portion of members' contributions is directed toward retirement savings rather than expenses. The administration cost is 0.5% of pensionable salary.

Comprehensive Wellness and Support:

Members receive access to holistic personal financial planning, advice, retirement counselling services, and a socio-psychological and health wellness support program.

Flexibility and Choice:

The YX Employee Benefit Fund allows members flexibility in their investment decisions, offering both a default life stage model and a Member Investment Choice option to elect individual investment portfolios.

5. What Are All the Benefits of the Fund?

The YX Employee Benefit Fund provides a superior value proposition to members and their families through its retirement structure, risk benefits, and value-added services.

Retirement and Withdrawal Benefits

As a defined contribution fund, the YX Employee Benefit Fund structure includes provisions for the two-pot retirement system, which applies to most members from September 1, 2024. Fund credit is split into three components:

Vested Component: Contains savings accumulated up to August 31, 2024, plus future interest. At retirement, this component differentiates between "Old Money" (pre-March 1, 2021, payable as a lump sum) and "New Money" (March 1, 2021, to August 31, 2024, where 1/3rd can be a lump sum and 2/3rds must be an annuity).

Savings Component: Grows with one-third of net monthly contributions and returns. Members may withdraw funds from this pot once every tax year (minimum R2,000), taxed at their marginal rate.

Retirement Component: Grows with two-thirds of net monthly contributions and investment returns and is accessible only at retirement. 100% of this component must be taken as a compulsory annuity/pension at retirement.

At retirement (normal retirement age is 60, early retirement from age 55), members who were 55 years or older on March 1, 2021, and did not opt into the two-pot system, retain the option to receive their full retirement benefit as a lump sum, provided they remain YX Employee Benefit Fund members until retirement.

The Fund also offers two post-retirement products: the YX Employee Benefit Fund Platinum life annuity and the YX Employee Benefit Fund Trustee endorsed living annuity.

Investment Options

Members can choose from various investment portfolios, including:

Aggressive Growth Portfolio: Maximizes capital growth over the long-term (suitable for members with 10+ years to retirement).

Capital Growth Portfolio: Targets growth over a medium to long-term horizon (suitable for members with 5 to 10 years to retirement).

Stable Growth Portfolio: Targets stable returns over the medium-term with low volatility (suitable for members with 1 to 5 years to retirement).

Capital Protector Portfolio: Provides capital security and extremely low volatility (suitable for members with less than 1 year to retirement).

Shari'ah Portfolio: A Sharia-compliant investment portfolio for Muslim investors.

The Fund also offers free financial advice through appointed advisors, Molo Financial Services.

Death and Disability Benefits

The YX Employee Benefit Fund provides options for death and disability cover, which are selected by choosing between various risk categories.

Category A Risk Options start with A0 (no cover, only fund credit payable) up to A1 (1 x annual pensionable salary lump sum + fund credit).

Category C Risk Options range from C0 to C5 (C3 is the default option, providing a lump sum of 3 x annual pensionable salary + fund credit for both death and disability).

Death benefit payments are subject to Section 37C of the Pension Funds Act, meaning a last will does not determine distribution, but the nomination form serves as an important guideline for the trustees.

Funeral Cover

All members receive funeral benefits for themselves and their qualifying family members, regardless of the risk category elected. The amounts vary by category structure (A vs C) and dependent status. For example, under Category A, the main member and qualifying spouse/life partner receive R14,000. Under Category C, the main member and qualifying spouse/life partner receive R58,000.

Voluntary funeral cover options are also available for extended family members through specific providers (Molo Funeral Society).

Value-Added Benefits and Services

Members benefit from additional services designed to support their financial and overall well-being:

• Financial Advice and Retirement Counselling: Provides holistic planning services covering tax, estate, investment planning, and preservation options.
• Health Heroes Service: Offers 24/7 confidential counselling to members and their families for addressing challenges like stress, health issues, and relationship problems.
• Pension-Backed Housing Loans: The Fund offers housing loan guarantees, based on the member’s fund credit, for purposes such as property purchases, renovations, or settling bonds (subject to approval and employer agreement with the financial provider).
• MOLO Workplace Benefits: Exclusive financial service discounts are available to YX EMPLOYEE BENEFIT FUND members on personal loans, home loans, and vehicle finance.
• MOLO Reality Access Loyalty Programme: Provides automatic access to benefits such as legal assistance, funeral support, emergency medical help, and lifestyle discounts.

What Happens If You Leave the Fund

Resign before 55:

• Vested Pot: Take cash, transfer to another fund, or preserve it.
• Savings Pot: Withdraw (if you haven’t already this tax year).
• Retirement Pot: Locked until retirement.

Retire at 55+:

• Lump sum, annuity, or a mix (depending on when the savings were made).
• Exception: If your total retirement savings are under R165,000, you can take it all in cash.

Summary

The YX EMPLOYEE BENEFIT FUND acts like a comprehensive financial safety net wrapped around a dedicated savings vehicle for software development professionals. It not only ensures resources accumulate through competitive investments but also provides immediate risk protection and crucial wellness support, making it a single point of financial management for its members’ present and future needs.