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Press Offices > Associations

Association for Savings and Investment South Africa
Press Office Feature : Fundisa education fund declares bonus of R6.9 million in 2014

Company: Association for Savings and Investment South Africa
Author:Lucienne Fild
Email:[email protected]
Posted:23 Feb 2015

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Fundisa is available from Standard Bank, Nedgroup Investments, and ABSA

The Fundisa education unit trust fund distributed a bonus payment of R6.9 million to some 25 000 beneficiaries from lower-income families in 2014.

Fundisa is a public/private sector partnership between the Department of Higher Education and Training, the National Student Financial Aid Scheme (NSFAS) and the Association for Savings and Investment South Africa (ASISA).

The initiative aims to encourage South Africans to save for the higher education of children from lower-income families.
 
Janete Nel, marketing manager at ASISA, says Fundisa’s assets under management grew from R132.4 million in 2013 to R181 million at the end of December 2014.

The fund had 19 588 investors at the end of December 2014 who are saving towards the education of 25 775 beneficiaries from lower-income families.
 
Fundisa applies a means test of an annual household income of R180 000 or less to the families of the beneficiaries.

The means test only applies to the families of the beneficiaries and not to the investors to ensure that high-income earners can invest on behalf of children from lower-income families.
 
Nel says anyone can therefore invest on behalf of a child, provided the child comes from a household earning less than R180 000 a year.
 
2014 Benefits
 
In addition to sharing in the R6.9 million annual bonus payment, each beneficiary also benefitted from the 4.6% average return achieved by the Fundisa Fund for the 12 months to the end of December 2014.
 
Nel explains that the returns of the Fundisa Fund would be in line with similar low risk investments.

“When Fundisa was created, all parties agreed that this should be a low-risk investment. For this reason Fundisa was launched as an interest bearing short-term unit trust fund of funds.”
 
Together with the bonus allocation, this translates to a total return of 29.6% for 2014 on the first R2 400 invested.

While investors can invest more than R2 400 a year, this is the maximum amount that qualifies for the bonus payment, provided no withdrawals are made during the year.
 
An annual bonus payment is not guaranteed, but Nel says as long as there are enough funds the bonus will be allocated annually to beneficiaries who pass the means test.

The bonus is funded from Government and private sector contributions.
 
How the bonus grant works
 
Investors in the Fundisa Fund have the benefits for their chosen beneficiaries enhanced by 25% every year to a maximum of R600 per learner.

So if you save R200 each month for a beneficiary from a lower-income household for 12 months in the Fundisa Fund, you will see the R2 400 investment grow by R600 to R3 000.

Furthermore, the R3 000 will also share in the overall investment return achieved by the fund in the next year.
 
The following bonus payments have been distributed since the launch of Fundisa:
 
 

Year

Investors

Beneficiaries

Bonus

2008

2 733

2 326

R 379 552

2009

4 864

6 929

R1.2-million

2010

10 338

13 522

R2.8-million

2011

12 994

18 357

R4.8-million

2012

14 383

20 873

R5.7-million

2013

17 591

24 997

R6.3-million

2014

19 588

25 775

R6.9-million


 
What is Fundisa?
 
The Fundisa Fund is administered by STANLIB. The underlying portfolios, which invest in bonds, fixed deposits and other interest earning securities, are managed by selected asset managers.
 
The Fund is open to investors wanting to save for the higher education at a public institution of a South African citizen or permanent resident who comes from a household earning R180 000 or less a year.

A minimum investment of R40 is required. The investor can then choose to pay R40 or more every month or top up the investment when money becomes available.
 
An annual fee of no more than 1.25% (excl VAT) applies, which is taken from the return earned on the money invested. Companies offering the Fundisa fund can discount this fee.

A maximum initial fee of 3% (excl VAT) may be charged, but only if the investment is made with the help of an independent financial adviser.

Fundisa is available from Standard Bank, Nedgroup Investments, and ABSA.
 
More information is available from the Fundisa web site at www.fundisa.org.za.

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