What is a provident fund?


Question:

Hi, I would like to know , is provident funds called as the workers funds or umbrella funds

Answer:

Sharon, A provident fund is a type of retirement fund - offered by an employer - that is governed by the Pension Funds Act. An umbrella fund is a structure that holds the retirement funds (pension or provident funds) of many different employers, to create economies of scale for all fund members. "Worker's fund" has no specific meaning in our law, it simply a reference to the employee's retirement fund, although it typically implies an industry (bargaining council) fund. Such a fund may be either a pension or a provident fund.

The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.


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