Grow your preservation fund
A preservation fund is a tax-efficient way to ensure that your hard-earned money goes towards your retirement.
By law, you can't make any additional monthly or lump sum contributions once you have invested in a preservation fund. You can only transfer money from a pension, provident or another preservation fund to a preservation fund.
Preservation funds differ from Retirement Annuities in that you can withdraw from them any time before the age of 55. But bear in mind that the withdrawal is subject to taxation and can only be done once in your lifetime.
If you've already taken money from your retirement fund before you transfer to a preservation fund you might not be eligible to make a withdrawal.
You can retire from your preservation fund any time after the age of 55. But you need to consider that there might be certain tax implications when you retire from the fund.
At retirement, for any non-vested benefits in a preservation fund, you are allowed to access up to 1/3rd of the funds in cash, subject to taxation, while the remaining portion must be used to purchase an income for life (Living annuity or guaranteed annuity). If your fund value is less than R 247 500 when you retire, you can access the full amount in cash, subject to taxation.
For any provident or pension preservation fund vested benefits at retirement, you can take the full benefit as a lump sum, or take a portion of the benefit as a lump sum and use the remaining amount to purchase an income for life (living annuity or guaranteed annuity).
We will accept transfers for amounts of R 25 000 and more.
Yes, and we can assist you with the process. The best part is that this transfer is done tax-free. Due to the number of parties involved in the process, these kinds of transfers can take some time. But not to worry, we will help you every step of the way.
A board of trustees is responsible for running the Preservation fund and protecting the interests of all members. If you die while still invested in the OUTvest Preservation fund the trustees must trace those that are financially dependent on you and allocate the funds appropriately.
Yes, once your money is invested in the OUTvest preservation fund it is protected from all your creditors, thus ensuring you have something to help you retire with one day, even if you were sequestrated.
Vested benefits are accrued rights as a result of any membership in a provident fund or provident preservation fund on 1 March 2021. If you have been a member of these funds at the time, any amounts contributed or transferred to these funds, before 1 March 2021, are seen as your vested benefits.
If you were 55 years or older on 1 March 2021, your vested benefits will also include any further contributions you made while you were a member of that provident fund, including fund returns. A vested benefit right gives you the right to be able to withdraw the full benefit value as a lump sum upon retirement.
Non-vested benefits relate to any other benefits in a retirement fund, which gives you the right to be able to only withdraw up to a maximum of 1/3rd at retirement. The remaining portion of the non-vested benefit must be used to purchase an income for life (Living annuity or guaranteed annuity) at retirement.
Recent legislation stipulates that you can withdraw your preservation fund under the following conditions:
-If you have emigrated from South Africa and your emigration is recognised by the South African Reserve Bank for purposes of exchange control. This is in respect of applications for that recognition received on or before 28 February 2021 and approved by the South African Reserve Bank or an authorised dealer in foreign exchange for the delivery of currency on or before 28 February 2022.
-If you leave South Africa at the end of a work visa or visitor’s visa, as contemplated in the Immigration Act of 2002, subject to the deduction of income tax on the amount, as provided in the Income Tax Act.
-If you are a person who is not a resident for an uninterrupted period of three years or longer on or after 1 March 2021. (But bear in mind that if you're under the age of 55 you don't need to wait 3 years or longer. You can make a full withdrawal from your preservation fund at any time, subject to taxation).