What is the LifeCycle Retirement Annuity Fund (RA)?
The LifeCycle Retirement Annuity Fund (“the Fund”) is a personal retirement savings vehicle which allows you to save for your retirement in a tax-efficient manner. The Fund is a legal entity which is managed by a Board of Trustees who are appointed to control and oversee its operations.
The LifeCycle Retirement Annuity Fund is a personal and/or group retirement savings vehicle which allows you to save for your retirement in a tax-efficient manner. You may transfer your existing RA to the LifeCycle Retirement Annuity Fund and there will be no penalties should you wish to transfer your LifeCycle Retirement Annuity Fund benefit to another provider.
The Fund is suitable for:
- Those that are self-employed.
- Those that have an irregular income stream and wish to change their contribution rates from time to time.
- Those that are formally employed and would like to supplement their retirement savings in a tax efficient way.
- Those that want to make provision for their dependents
If you contribute to the Fund, the amount that you will receive at retirement (at any time after age 55) will be an accumulation of your contributions, plus the investment returns achieved on your investment choice, less any fees and charges.
When you retire from the Fund, a maximum of one third of your benefit may be commuted to a cash lump-sum. A portion of the lump-sum will be tax free. The balance of the benefit must be utilised to purchase an annuity from a registered insurer which will provide you with an income during retirement.
You may transfer your existing RA to the LifeCycle Retirement Annuity Fund and there will be no penalties should you wish to transfer your benefit in The Fund to another provider. In the event of your death, the trustees will need to decide on how to apportion your accumulated investment value.
This decision is made at the trustees’ discretion, based on the needs of your dependents and nominated beneficiaries.
Why, How Much and How?
Why LifeCycle Living Annuity?
The Fund provides you with a tax-efficient, low cost, flexible retirement savings product
which is easy to understand. The contributions that you make to the Fund will be tax-deductible
on an annual basis as follows:
- Up to 27.5% of your taxable income is allowed as a tax deduction; or
- A maximum of R350 000 per annum in aggregate;
Not only are the contributions to the RA deductible in your hands, but income, capital gains and dividends generated from the investments are exempt from taxation. The Fund is flexible and you are able to make an initial lump-sum contribution as well as making on going contributions by debit order. This option allows you to make changes to your contribution rates as well as to suspend contributions if necessary.
The Fund will give you access to a range of investment options with exposure to all the relevant asset classes. The various investment options are managed by Clyde Investment Management (Pty) Ltd and a number of other managers.
What is it going to cost me?
You will pay an on-going administration fee which depends on the size of your investment. All fees are quoted as a percentage of assets excluding VAT, under management on an annual basis. In the event of your death a fee may be raised to enable the administrator and sponsor to trace your dependents and allocate the death benefit payable to your dependents in terms of the Pension Funds Act.
If you want more information please request a quote by sending a mail to firstname.lastname@example.org and the administrator will communicate with you. Your investment will need to be compliant with Regulation 28 of the Pensions Fund Act No.24 of 1956. Please remember that should your investments breach any of the regulation 28 requirements the Trustees will adjust your portfolio holdings to ensure compliance. The on-going administration fee includes web access. The investment management costs are shown in the fund fact sheet of the relevant investment option.
What do I do to get started?
- Request a quotation by sending a mail to email@example.com
- The Administrator will communicate with you and sent you a quote, terms and conditions and an application form
- Compile the following supporting documentation:
- ID document containing a photo, full names, date of birth and ID number, valid passport or a valid driver’s licence
- A document no older than three months containing residential address that is a utility bill, bank statement, rates account or tax invoice
- Proof of banking details
- Proof of SARS registration or Tax number
- Send the completed application form and supporting documentation to the administrator.
What happens after I sign up?
- The administrator of the fund will provide you with the following:
- Provide you with online access
- A transaction confirmation statement and a policy document
- Regular benefit statements
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