About Preservation Funds and Why You May Need One | Legacy BlueStar | Sanlam Financial Planners Bellville, Cape Town

Retirement

What to know about preservation funds and why you may need one

You’ve just landed a new job and have handed in your resignation. Now you need to move your retirement savings (in a pension or provident fund) from the employer you are leaving.

Obviously, you want to protect and grow these hard-earned savings. Preservation funds offer one of the best solutions to do so. Your existing retirement savings need to be cared for even while you continue to work and build more retirement savings with your new employer or through your private retirement annuity. Remember to think carefully before you “steal” these savings from your future retirement by cashing them in now.

Whenever you have the option to withdraw from an employer’s approved pension or provident fund, you can transfer your withdrawal benefit to a pension preservation fund or a provident preservation fund. Jabulani Sibanyoni, Business Development Manager at Glacier by Sanlam, explains what you need to know about this important decision.

What is a preservation fund and how does it help you?

Preservation funds offer a flexible way of retaining and growing your retirement savings when you leave an employer. They were specifically designed for this exact purpose, namely to help you protect and grow your retirement savings when you change jobs. In simple terms, a preservation fund is a type of retirement savings fund that focuses on the growth and protection of savings that may no longer be held in an occupational fund (a pension or provident fund).

BENEFITS

The Glacier Personal Portfolios Preservation Funds offer the following benefits:

1

Your retirement capital is preserved and may continue to grow. You have various investment options on the Glacier platform to help you grow the capital amount. At retirement, you can easily transfer your retirement savings to a retirement income product, such as a living annuity or a conventional life annuity.

2

Your retirement savings in the preservation fund will be protected against creditors

3

No tax is payable on the growth of your capital in this fund (interest, dividends or capital gains).

4

You can choose when to retire from this fund as long as your chosen date is after age 55. You can make one withdrawal before retirement. Although a withdrawal may not be advisable, you may withdraw all your money or part thereof.

Confident investing for retirement

“The Glacier Personal Portfolios Preservation Funds offer you continuity, protection, tax benefits and access to your money,” says Jabulani. “With a minimum lump sum of R100 000, you can invest for growth in a way that suits your unique financial circumstances and tolerance for risk.”

Be cautious, though, he says. It’s not ideal to make any investment decision without the help of an appropriately authorised financial adviser. Your retirement savings are a critical step to a confident future and should last as long as you live. Investing your hard-earned savings must be done with the help of a professional.

Glacier Financial Solutions (Pty) Ltd is a Licensed Financial Services Provider.

Sanlam Life is a Licensed Life Insurer, Financial Services Provider and Registered Credit Provider (NCRCP43)

The Personal Portfolios Preservation Funds are administered by Glacier Financial Solutions (Pty) Ltd.

Get expert financial advice

Speak to us now and get advice from an accredited financial planner.

Speak to a planner

Connect with us on Facebook

Follow us