Preservation fund topup ?

zerocool2009

zerocool2009

Honorary Master
Joined
Sep 4, 2009
Messages
12,970
Reaction score
5,081
Location
Centurion
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 :(
 
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 ).
 
Kosmik said:
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 ).
Click to expand...

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
 
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
 
zerocool2009 said:
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
Click to expand...

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.
 
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
 
supersunbird said:
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.
Click to expand...

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.
 
zerocool2009 said:
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
Click to expand...

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.
 
SauRoNZA said:
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.
Click to expand...

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).
 
supersunbird said:
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).
Click to expand...

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.
 
SauRoNZA said:
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.
Click to expand...

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.
 
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
 
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)
 
zerocool2009 said:
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
Click to expand...
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)
 
Koosvanwyk said:
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)
Click to expand...

thanks. I am fees driven now. I understand NO topups are allowed
 
Necro warning!!!

Is there some SARS approval required for moving from a Pension Fund to a Pension Preservation Fund, and how do you go about getting such approval from SARS these days?

I ask this because it's a field on the form to move money out of the Pension Fund, it's not clear if this is a not applicable scenario on this form.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X