Preservation fund topup ?

zerocool2009

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Is there any investment firm out there that allow you to topup a preservation fund?

Meaning, lets say you move from firm A to B, and want to add a debit order of R5000

It sounds like that aint doable at all :(
 

Kosmik

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You can transfer into an RA. You can't top up a preservation fund but transfers are allowed. Also one withdrawal ( but that is heavily taxed ).
 

zerocool2009

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You can transfer into an RA. You can't top up a preservation fund but transfers are allowed. Also one withdrawal ( but that is heavily taxed ).
Thanks for that. Allan Grey replied to me, I cant merge funds (RA's and preservation funds).

I am still "shopping around" for any firm who allow's that
 

zerocool2009

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Thinking about it now ... It is the dumbest move to ever resign from a firm who has a provident fund (as you cant ever top it up EVER again) L O L
 

supersunbird

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Thinking about it now ... It is the dumbest move to ever resign from a firm who has a provident fund (as you cant ever top it up EVER again) L O L
You are incorrect in your analysis of the problem.

The preservation fund has the top up restriction, not the provident fund. A pension preservation fund will have the exact same issue. You could have moved it into a RA.

Preservation funds don't allow top-ups, but they do allow one taxable withdrawal. Retirement annuities allow no withdrawal.

One might want the ability to be able to access some/all that money in a real SHTF situation. If I ever leave my employer I'll put my provident fund into a preservation fund with a provider of my choice, for that reason.
 

zerocool2009

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Thanks for the feedback SSB

Ok, my issue is, I have a preservation fund, and I want to move it. So going from firm A to B (its then only all fee related), nothing more
 

SauRoNZA

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You are incorrect in your analysis of the problem.

The preservation fund has the top up restriction, not the provident fund. A pension preservation fund will have the exact same issue. You could have moved it into a RA.

Preservation funds don't allow top-ups, but they do allow one taxable withdrawal. Retirement annuities allow no withdrawal.

One might want the ability to be able to access some/all that money in a real SHTF situation. If I ever leave my employer I'll put my provident fund into a preservation fund with a provider of my choice, for that reason.
No you don’t want to put it in an RA because then you have the restriction of not being able to take the entire lump sum at retirement.

Which is exactly why this restriction was put in place.

You want to put a provident fund into a provident preservation fund specifically to retain the tax benefit linked to it from days gone by.

And provident funds have the same restriction I believe, unless you leave it with the company and keep it open with them.

You can’t move it to a preservation fund and then contribute to it.
 

SauRoNZA

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Thanks for the feedback SSB

Ok, my issue is, I have a preservation fund, and I want to move it. So going from firm A to B (its then only all fee related), nothing more
You can most certainly move it, that they can’t stop you from doing.

But it’s a legal thing as to why you can’t top it up as the legislation around it changes over time and those funds are basically locked into old rules now.

A provident fund you can cash out in its entirety and do with as you please once you hit retirement age or emigrate.

An RA you can only take out 1/3rd and the rest must be put into a living annuity.
 

supersunbird

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No you don’t want to put it in an RA because then you have the restriction of not being able to take the entire lump sum at retirement.

Which is exactly why this restriction was put in place.

You want to put a provident fund into a provident preservation fund specifically to retain the tax benefit linked to it from days gone by.

And provident funds have the same restriction I believe, unless you leave it with the company and keep it open with them.

You can’t move it to a preservation fund and then contribute to it.
I know, just saying he could have if he wanted to keep topping it up (not that I see the need to do that, top up some other RA).
 

SauRoNZA

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I know, just saying he could have if he wanted to keep topping it up (not that I see the need to do that, top up some other RA).
Yeah it makes no difference putting it all into one pool at the end of the day, but many people think they should do that for some reason.
 

zerocool2009

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No you don’t want to put it in an RA because then you have the restriction of not being able to take the entire lump sum at retirement.

Which is exactly why this restriction was put in place.

You want to put a provident fund into a provident preservation fund specifically to retain the tax benefit linked to it from days gone by.

And provident funds have the same restriction I believe, unless you leave it with the company and keep it open with them.

You can’t move it to a preservation fund and then contribute to it.
I resigned back in 2008 -> then provident fund -> now preservation fund (but want options). So I assume it is all about cost now with no contributions.
 

diapason

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A preservation fund is just what the name implies. It preserves what you already have, nothing more.
 

zerocool2009

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I totally understand what a preservation fund is. I was purely looking for clients out their who is paying low fees (and who are happy), as I am looking to switch to another provider
 

zerocool2009

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Well, let me summarize :

Input in Dec 2008 : R295k
Today's value : R837K
Growth : R616K

Fees : 65K
Internal Rate of Return (IRR) over statement period (annualised) : 10.09%

Honestly, I think fees are slowly eating it up (thats my honest view)
 

Koosvanwyk

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Thanks for that. Allan Grey replied to me, I cant merge funds (RA's and preservation funds).

I am still "shopping around" for any firm who allow's that
You wont find any that allow "top ups" into preservation funds for the simple reason that it would be illegal. Preservation can may only receive transfers from other pensions/provident fund (pre tax money)
 

zerocool2009

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You wont find any that allow "top ups" into preservation funds for the simple reason that it would be illegal. Preservation can may only receive transfers from other pensions/provident fund (pre tax money)
thanks. I am fees driven now. I understand NO topups are allowed
 
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