Key Characteristics

This is an essential savings product that allows individuals to provide for retirement by contributing single or recurring contributions in a tax efficient manner. In most instances, one is able to receive tax relief on a proportion of the contribution that is invested in a retirement fund.

There are also a number of benefits that may be derived when the policy reaches maturity. To fully appreciate the tax benefits that are provided by these funds, investors should consult their tax adviser.

Transfers from other approved pension, provident, and retirement annuity  funds are also accepted. Investors may be allowed to make use of various investment options to facilitate various forms of diversification options and customised risk profiles. These products are required to follow prudential investment guidelines, which maintain a degree of diversification by asset class.

How it Works?

With a retirement annuity the investor contributes towards a fund with the aid of single or recurring contributions. Should they satisfy the requirements for tax relief, then they may be able to claim back the amount of income tax that would have been paid on the respective contributions. If the respective retirement fund is unitised, the investor may be able to choose from various alternative  investment funds that would usually be associated with different risk profiles. The respective investment funds would provide various diversification benefits as they would usually invest in a large number of securities from within different sectors, geographic locations, etc.

The Benefits

Investors should consult the respective terms and conditions. Benefits are payable on your retirement, withdrawal (subject to current limits), death or disability. Please refer to the Retirement Fund Death and Disability slide.

Investment Options

The member can choose between three investment portfolios that include:

• New Moon - High Equity Portfolio with a benchmark of CPI + 3%

• Half Moon - Progressive Portfolio with a benchmark of CPI + 1%

• Full Moon - Stable Portfolio with a benchmark of CPI

• Cash / Income portfolio

These portfolios have been designed to coincide with the changing needs of investors, as they approach retirement.

Withdrawal or Retirement

Retirement Lump Sum Benefits

Lump sums accruing between 1 March 2024 and 28 February 2025

Taxable portion of withdrawal  :  Rates of tax

R 0 - R 550 000  :  0% of taxable income 

R 550 001 - R 770 000  :  18% of taxable income above R 550 000

R 770 001 - R 1 155 000  :  R 339 600 + 27% of taxable income above R 770 000

R 1 155 001 and above  :  R 143 550 + 36% of taxable income above 1 155 000

Withdrawal or Retirement

Lump sums accruing between 1 March 2024 and 28 February 2025

Taxable portion of withdrawal  :  Rates of tax

R 0 - R 27 500  :  0% of taxable income

R 27 501 - R 726 000  :  18% of taxable income above R 27 500

R 726 001 - R 1 089 000  :  R 125 730 + 27% of taxable income above R 726 000

R1 089 001 and above  :  R 223 740 + 36% of taxable income above R 1 089 000