Hollard Retirement Annuity Plan

The Hollard Retirement Annuity Plan provides a tax-efficient way to save for retirement. It can be taken as an alternative or in addition to your employer pension or provident fund. 

You may contribute via both lump sum investments and recurring debit orders. You can invest a once-off contribution at any time and may start, stop, or amend a monthly debit order investment at any time. You may also invest the following retirement fund benefits into the product, subject to the product rules and relevant legislation: 

• A pension or provident fund benefit, which is transferred in the event of your resignation, retrenchment, or dismissal from an employer. 
• A retirement annuity fund benefit is transferred from another retirement annuity fund. 
• A pension or provident fund benefit from a pension or provident fund, which has been wound up. 
• A benefit received as part of a divorce settlement via an approved court order, which the recipient can elect to invest into the Hollard Retirement Annuity Plan. 
   

From 1 September 2024 Contributions will be split two thirds into the Retirement Component and one third into the Savings Component. The Member is not permitted to allocate Contributions contrary to this allocation as required by legislation. When transferring Benefits to the Fund, all components must be transferred together (i.e. no splitting of components is permitted).

You can choose from a range of  Investment Portfolio options. You may select any one or a combination of them and may switch between portfolios at your discretion. It is important for you to monitor and review your investment portfolio selection so that it continues to meet your financial needs.
 

The Fund cautions Members against implementing different investment strategies across components. Collectively the components aim to provide Members with an income in retirement and must be managed as such. Members should consult with theiryour financial advisor in this regard.

To protect a member’s retirement benefit, the Pension Funds Act contains guidelines that regulate the extent to which a member may invest in certain asset classes. Hollard is required to ensure that your investment complies with these asset exposure limits, which broadly speaking are as follows: 

• 75% exposure to equities. 
• 50% exposure to non-government debt instruments. 
• 45% exposure to offshore assets.
• 25% exposure to property. 

Each Investment Portfolio offered to investors in the Hollard Retirement Annuity Plan complies with the Regulation 28 limits.  

Yes, additional contributions can be added to the investment at any time via Lump sum or debit order. Your debit order can start, stop, or be amended at any time. 

Monies from the Savings Component should only be withdrawn when you find yourself in financial distress or in emergency circumstances. Withdrawing from this component will reduce your ability to earn the required income in retirement and should be avoided as far as possible. The Fund cautions against this practice and would encourage you to preserve the amount in the Savings Component until retirement.
 

The following Withdrawal exceptions apply:
 

• Should the total value across all components be less than R15 000, a full withdrawal before retirement is permitted.
• Members may withdraw from the Vested Component, Vested Right and Retirement Component when the Member:
  • Ceases to be tax resident for an uninterrupted period of 3 years; or
  • Departs from South Africa at the expiry of a work visa, or

  • Where the Member filed their financial emigration on or before 28 February 2021 and approved by the South African Reserve Bank or an authorised dealer in foreign exchange on or before 28 February 2022.

• Contributions: Contributions made to a retirement annuity fund are tax-deductible up to a legislated maximum and must be declared on your tax return. 

• Payments: Income tax will be deducted from any benefit taken in cash before it is paid out on any pre-retirement withdrawals; retirement; or death, per Income tax legislation. Hollard will apply for a tax directive to facilitate this process.

• Investment returns are not subject to Capital Gains Tax, Interest Income tax or Dividend taxes.

You may request to retire from the Fund once you have reached the age of 55. You may request an early retirement in the event of permanent disability due to ill-health. Early retirement requests are granted at the sole discretion of the Trustees of the Fund. 

Depending on what components forms part of your retirement savings, the following options are available to you:
 

• Retirement Component:The full value must be used to purchase a compulsory annuity from an insurer.
• Savings Component: The full value can be withdrawn in cash, and any amount not withdrawn must be used to purchase a compulsory annuity from an insurer.
• Vested Component: One-third of the value may be withdrawn in cash, with two-thirds being used to purchase a compulsory annuity from an insurer. Any amount not withdrawn must be used to purchase a compulsory annuity from an insurer.
• Vested Right: The full value can be withdrawn in cash, and any amount not withdrawn must be used to purchase a compulsory annuity from an insurer.

It’s not required but we highly recommend that you appoint a financial advisor to assist you. Hollard Investments in their capacity as the Administrator don’t provide financial advice and may only supply factual or administrative information relating to the investment products and portfolios. 

Hollard Investments will allocate any benefit due to the nominated beneficiaries as specified in the policy. Should there be no beneficiaries on record, any benefit will be paid to the deceased estate of the investor. The benefit due on the death of the investor is the value of the investment at the time of processing the death claim, less any fees and charges. Each beneficiary who has been awarded a portion of the death benefit will be provided with the benefit in one of the following ways: 

• The purchase of a compulsory annuity from Hollard Life or another registered long-term insurer.
• A cash lump sum pay-out. 
• A combination of compulsory annuity purchase and a cash payout.
• The purchase of an accelerated annuity is to be paid over a minimum term of 5 years. For minors, the minimum term will be the greater of 5 years or the number of years to the age of 18. Any benefits taken in cash will be subject to income tax.

Hollard Investments, in their capacity as the administrator and the manager, doesn’t provide financial advice and may only supply factual or administrative information relating to the investment products and portfolios.