The PPS Preservation Funds are pre-retirement products that reinvest your retirement capital with the aim of preserving these savings once you have left either a pension or provident fund.
You may transfer to a preservation fund from a pension or provident fund without paying tax at transfer, which means that you are able to delay your tax liability until retirement. Preserving the tax status of an investment in this way has the effect of maximising the tax-free lump sum available and therefore gives the potential to generate higher investment returns. Preservation funds are especially beneficial for individuals who have changed employment as a result of resignation or retrenchment or for individuals whose occupational retirement fund has been closed. Upon retiring from the PPS Preservation Pension Fund, a maximum of one third of your retirement proceeds may be taken as a cash lump sum, a portion of which is tax free (the first R500 000, provided that no previous withdrawals have been made). The remaining two thirds of your capital need to be utilised to purchase post-retirement income from a registered insurer. The PPS Preservation Provident Fund has no prescribed codicil relating to the purchase of an annuity. The full value of your retirement proceeds may thus be taken as a lump sum, of which the first R500 000 may be tax free.
QUICK GUIDE: FEATURES AND BENEFITS
Lump sum: R50 000 Recurring: Not applicable *Ad hoc: Only if fund origin is the same *Additional permissible investments would specifically be surplus payments due to accruals from the transferring fund.
You may transfer an existing preservation fund, depending on the source, to the PPS Preservation Pension or PPS Preservation Provident Fund. You may also transfer your investment from either of the PPS Preservation Funds to another registered preservation fund. This is known as a Section 14 transfer.
The growth on your PPS Preservation Pension or PPS Preservation Provident Fund does not attract capital gains tax or withholding tax on dividends. Interest,
foreign dividends and rental income are also currently untaxed.
You may make one withdrawal up to the full value of the preservation fund before retirement. Where the source of the funds is the Government Employee Pension Fund, the withdrawals will be limited to one-third of the value. Currently R25 000 of this withdrawal is tax-free.
The PPS Preservation Pension and PPS Preservation Provident Fund are required to comply with the Prudential Investment Guidelines of Regulation 28 of the Pension Funds Act and with Exchange Control legislation. As such, you are allowed maximum exposures of 75% of the investment amount to equity investments, 25% to property investments, 25% to international investments and 5% to African investments. This is applied on an individual member level as well as on an overall Fund level.
Board of Trustees
The PPS Preservation Pension and PPS Preservation Provident Funds are governed by an independent Board of Trustees with extensive experience and understanding of retirement fund issues. The Board comprises a Chairman, a professional Principal Officer and several Trustees.
Upon death, the proceeds of your PPS Preservation Pension or PPS Preservation Provident Fund may be used to purchase an annuity to provide an income for your dependants and/or beneficiaries*. Such income would be taxed at the marginal tax rate of the recipient(s). Your beneficiaries or dependants would also have the option of commuting the proceeds to a cash lump sum. In this instance, the lump sum would be taxed according to the tax tables at your average tax rate.
*Please note that the allocation to the beneficiaries is at the discretion of the Trustees, based on the Provision of section 37C of the Pension Funds Act, No. 24 of 1956. Your nomination will serve to assist the Trustees in making these decisions, but may not be binding on them.
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With the InvestNow functionality, you're able to place new investments, top up existing investments, switch or make withdrawals. And in-app notifications keep you updated on the progress of your transactions. A nifty retirement calculator and access to key documents like tax certificates are added benefits. Click here to use this functionality.
Printing and completing an application form You're also welcome to print the application form and send it to our Validations Team at email@example.com. For any further support, contact our dedicated client service teams are available between 8:00 and 17:00, Mondays to Fridays at 0860 468 777 or firstname.lastname@example.org to assist you with your transaction.