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Pension Annuity

When do I start considering investment in the Pension Annuity?

Saving towards your retirement should  commence when you start working.

As a member of a pension, provident or retirement annuity funds, you must use at least use two thirds of your proceeds to purchase an annuity.

Pre-Retirement Products

Post-Retirement Options


Employer Contributing Funds

Pension Fund

If the amount is below R247,500, you can take full amount as cash.

If the amount is above R247,500, you are allowed to take max 1/3 as cash and the 2/3 needs to be used to purchase a compulsory annuity.

Provident Fund

One is able to take the full amount as cash at retirement.

One can use the proceeds to purchase an annuity.


Voluntary Retirement Savings


Preservation Pension Fund

The above options would be applicable to the preservation funds as well.

Preservation  Provident Fund

The above options would be applicable to the preservation funds as well.

Retirement Annuity Fund

If the amount is below R247,500, you can take full amount as cash.

If the amount is above R247,500, you are allowed to take max 1/3 as cash and the 2/3 needs to be used to purchase a compulsory annuity.

How is this investment taxed?
Investment income accruing on the investment portfolio of a living annuity during the term of the policy is untaxed while in the hands
of the life insurance company. Your monthly annuity or pension is taxed in your hands as income.

What rate of tax is payable on the Pension Annuity?
The rate of taxation will depend on your total taxable income during any year.

How does the pension / annuity amount get paid to me?
At the time of completing the application form you will select the income rate as well as the frequency of the income. You are
required to provide bank account details, in your name, into which the annuity will be paid.

How do I make adjustments to the income or the frequency of payment?
Annually your annuity would be adjusted by the rate decided upon by the insurer and will be communicated to you.

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