The Employee Fund
Since 2005 we have managed employee savings and loan schemes in terms of
the South African Reserve Bank Proclamation 2173 of 14 December 1994; which serves as an exemption to the banks act.
This exemption allows groups of persons, with a common bond, to pool their savings and operate a rotating loan scheme to create capital.
A Self-funding Workplace Savings and Loans Scheme
The Employee Fund empower employers to provide a platform to employees where employees can have a financial safety net, while also actively saving for planned expenses.
The aim of the fund has always been to encourage financial wellness amongst members; therefore, the fund also offers additional financial benefits customized specifically to the member or scheme’s needs.
Benefits to the Employer
✓ TAG Employee Fund Administrators allows employers to offer workplace benefits to all employees
✓ Members save monthly towards a self-funding end of year bonus
✓ The fund enables the HR Department to legally assist employees with requests for advances and crisis loans
✓ The fund can contribute towards the company’s social upliftment strategy
Benefits to the Employee
✓ A professionally managed stokvel with profit share between members
✓ Savings deducted directly from your payslip
✓ Access to loans and advances approved and paid out within 24hours after receipt of all documentation
✓ The employer acts as a guardian for the fund
Safeguarding of Funds
Each company’s employee fund is operated as a separate legal entity with a dedicated bank account; therefore, the existence of the fund is not connected to the existence of TAG Employee Fund Administrators and TAG Employee Fund Administrators cannot utilize the capital for non-fund related expenses.
Savings and loan instalments are deducted directly from employee salaries, significantly reducing the risk of loans; this, combined with a fund bad debt provision, guarantees members savings safety.
Administration of payroll deductions
Savings contributions and loan instalments are deducted from employee salaries. TAG Employee Fund Administrators provides the reconciliation of all payroll deductions in a CSV file which can be imported directly into the company’s payroll, with contributions appearing on employees’ payslips.
Discontinuation of the fund by the employer
The fund capital is owned by the employees and in case of fund cancellation by the employer this capital will be returned to the employees after a 6 month waiting period. During this time TAG Employee Fund Administrators will collect all outstanding debts.
Member resignations
In a situation where a resigned member has an outstanding loan from the fund,
member savings will be used to settle this debt and any outstanding amounts will be submitted as a payroll deduction for the final salary payment to the member. If this does not cover the full outstanding amount, all effort will be made to recover this from the member directly, if failed the bad debt provision will be used to settle the loan.
If the member has savings in the fund at the time of his resignation this will be paid out to the member directly
Profit share vs Bank Interest
Profit share is dependent on fund growth, but members will receive a guaranteed 5% annual profit share on their savings.