A little less than an hour can save your family from a year’s worth of stress

The average time it takes a member to complete three nomination forms is just less than an hour. It can take longer if you have more family members, and a lot quicker if your family is small. Setting aside this time could save your family a year of financial stress if you passed away unexpectedly. That’s because it can take up to a year for your money to be paid to your family if your nomination forms are not submitted or if they are not up to date.

That means one hour of your time in exchange for up to a year of financial distress for your beloved family members!

A typical fund member has three nomination forms to complete

Let’s look at your nomination forms in a different way. Each form unlocks money for your family during difficult times. Depending on what your employer has signed up for, these are the three most common nomination forms a retirement fund member needs to complete:

1 Your retirement savings in the fund and life cover – if your employer has opted for this benefit

2 Life cover from an employer policy – if your employer has opted for this benefit

3 Funeral cover – if your employer has opted for this benefit

Payout of your retirement savings

A nomination of beneficiary form tells the trustees or the insurer whom you would like to receive a share of your retirement savings or, for example, your life cover or funeral benefit. It should be those whom you support financially.

Even though, by law, the trustees make the final decision on how this money must be shared out, if you have an upto-date nomination form, it will guide them and help them conclude their decision faster. This payout includes all the contributions allocated towards your retirement savings. In other words, your total amount of retirement savings.

Payout of your life cover

This can either be as part of your retirement fund or through a separate policy from your employer. In both cases, an updated nomination form is necessary. If your life cover is through the fund it is paid out with your retirement savings. Your beneficiary nomination form will guide the trustees on how your money is shared out. If you have life cover through an employer owned policy, the insurer will pay the beneficences you nominated with no trustee involvement. The total amount that is paid out is usually your yearly fund salary multiplied by a fixed number, for example your yearly fund salary times two. This can be a substantial amount and can help your family with basic day-to-day living expenses when they are grieving. It can carry them through a very difficult time.

Payout of funeral cover

This money will be paid out to cover the costs of your funeral. If you don’t have a nomination form on record, the money will be paid into your estate. Once this money is in the estate, your family will have to wait for your estate to be finalised – which, as mentioned, can take quite some time. The money will also attract estate tax.

Quick tip 1

If you have other policies outside the fund, you will need to complete nomination forms for those as well.

Remember: Your fund salary (or pensionable salary) is not your net salary or take-home pay. It is the salary on which your contributions are based. This is determined by your employer.

Update payout of your retirement savings forms on AF Online or the AF Mobile app. Otherwise you can get the other forms from your HR department.