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A Retirement Annuity is an effective way to save for retirement because:

  • Your savings provide you with an income in your retirement years
    When you retire, you may take up to one third of your accumulated savings in a cash lump sum. The rest is used to provide you with a monthly income.
  • You save tax
    Your retirement annuity contributions reduce your taxable income up to certain limits: part of your contributions come from tax savings, which means that the South African Revenue Service (SARS) is actually paying a part of your retirement savings. Another big tax advantage is that the growth on your investment is tax free.
  • Your savings are protected from your creditors
    Your retirement savings are safe irrespective of any personal financial loss you may suffer. This ensures that your savings will be available when it is most needed and for what it is intended - the provision of your retirement income.

According to current tax legislation, and depending on your tax situation, retirement annuities have the following tax advantages:

  • You can deduct your contributions to a retirement annuity from your taxable income, up to a specified limit. This means that you pay less tax when you contribute to a retirement annuity. Contributions in excess of the limit can be carried forward and deducted from future taxable income, including a retirement lump sum or pension income.
  • The investment returns earned in a retirement annuity fund is not taxed at the moment.
  • At retirement, the lump sum benefit is tax free up to a specified limit. Regular pension payments are taxed as income.
  • This does not only mean that tax is delayed, but because the tax rebates, rates and allowable deductions change at ages 65 and 75, less tax will be paid.
  • All limits referred to above are specified annually for the tax year.

The earlier you start saving, the better. If you cannot save the recommended amount, save whatever you can afford. You can also add some of your bonus payments to your retirement annuity.

The Sanlam Retirement Annuity is designed to inspire you to start saving for a comfortable retirement and to help you stay motivated to keep going and stay on track. It is one of the most cost effective savings options available, combined with investment peace of mind.

Your retirement savings are managed on your behalf
The Sanlam Retirement Annuity offers an investment facility where your savings are gradually switched as you get closer to retirement, at an extremely low cost. Therefore you do not have to study the markets yourself to make investment decisions - instead you have complete peace of mind for the duration of your investment.

Added value of the Echo Bonus
Sanlam will boost your retirement savings by adding an additional amount, called the Echo Bonus, at retirement or termination. The longer you save, the bigger the bonus.

Cost-effective savings option
The Echo Bonus makes the Sanlam Retirement Annuity one of the most cost-effective savings options in the market.

The Echo Bonus is an amount that will be added to your fund value when you retire or end the plan. The more payments you make, the higher your Echo Bonus.

Your Echo Bonus is always a percentage of your fund value. The Echo Bonus percentage depends on the term for which payments have been made. The longer the term, the higher the Echo Bonus percentage.

The Echo Bonus percentages for the online Sanlam Retirement Annuity are indicated in the following table.

Term in years Echo Bonus %
0 0
5 7
10 15
15 25
20 35
25 55
30 75
35 95
40 115

To receive retirement annuity benefits, you must be a member of a retirement annuity fund. For the Sanlam Retirement Annuity, this is the Central Retirement Annuity Fund.

The Central Retirement Annuity Fund takes out a plan with Sanlam Life Insurance Limited on the member's life, in order to provide the retirement benefits. The Fund, and not the member, is the plan holder.

The Core plan invests in the Satrix Life Time Investment Option. The Comprehensive plan offers the flagship Sanlam Unit Trust funds and qualifying funds from other leading fund managers.

The current charges for the Sanlam Retirement Annuity:

Marketing and administration charge
This is equal to a percentage of the fund value and is subject to a minimum of R40 per month, which will be adjusted yearly to allow for inflation.

Fund value band Yearly marketing and administration charge % of the fund value of the plan
First R500 000 3.75
Excess above R500 000 3.50

 

Asset management and other direct investment charges
The asset managers include the asset management charge when setting the unit prices for the investment funds. The charge is a percentage of each plan's part of the market value of the assets in the investment fund.

Investment fund Yearly % of market value
SATRIX Dynamic Balanced Fund 0.20
Wealth Protector 0.25

A transaction charge is applicable for each of the changes below. The charge is currently R300.

  • Reducing or stopping of the recurring payment;
  • Taking an early retirement benefit;
  • Terminating the plan due to emigration.
This transaction charge will not be taken for changes made after the planned retirement date.

As soon as your application has been processed, you will have 30 days in which to examine the contract documents, and decide whether you wish to continue with the plan.

If the plan does not meet your requirements, and if you have not made any changes to it, you can cancel it by notifying us in writing during this period. We will then refund any payments you have already made. If the assets in which the payments were invested have decreased in value, or if you have already received benefits from the plan, we will reduce the amount to be refunded to you accordingly.

If you require further information on your Sanlam Retirement Annuity, please phone our Client Contact Centre at 021 916 5000 or 0860 SANLAM (0860 726 526), or send us an e-mail at life@sanlam.co.za. Our ompliance department can be contacted at the same number.

The plan starts on the date that the first payment is collected. If we cannot collect the first payment on your preferred start date, we will collect the first payment one month later and move the start date accordingly.

Yes, the recurring payment will increase with the Sanlam inflation rate one year after the plan's start date, and on every plan anniversary thereafter.

The Sanlam inflation rate is determined taking into account the change in the consumer price index, or any other commonly accepted method of measuring inflation that may apply at the time. The Sanlam inflation rate may differ from published inflation rates, due to differences in calculation methods. A minimum rate applies, which may change from time to time.

Yes, you can add one-off contributions at any time after your plan has been issued. Please call the Sanlam Client Contact Centre at 021 916 5000 or 0860 SANLAM (0860 726 526), or send an email to life@sanlam.co.za to arrange.

In your application, you need to indicate the date that you want the first payment to be deducted. If it is not possible to deduct the first payment on this date, we will deduct it one month later.

All payments are due on the same day of the month as the date selected for the first payment, or the first working day thereafter if the due date is not a working day.

Select the date for the first deduction to fall on or just after your salary payment date, to ensure that you have sufficient funds available.

The recurring payment can be increased, reduced or stopped. Contact the Sanlam Client Contact Centre at 021 916 5000 or 0860 SANLAM (0860 726 526), or send an e-mail to life@sanlam.co.za

  • The minimum increase amount is currently R150 per month.
  • If you reduce the payment, it cannot be less than the minimum payment for a new plan. Currently this is R250 for investments of 20 years or longer, R350 for 15 to 20 years and R450 for 10 to 15 years.
  • The recurring payment may only be stopped if the remaining fund value of the plan will be at least R70 after deducting the transaction charge. If not, the plan will lapse.

The SATRIX LifeTime Investment Option fund initially invests in a passively managed fund, tracking a basket of indices at a very low investment fee. Six years before your retirement date, your investments are phased into the Wealth Protector fund to protect your savings against the possibility of capital loss at your planned retirement date.

We invest your full payment in the respective investment funds by buying units in each of these funds. The unit prices of the investment funds are not guaranteed, and may increase or decrease over time.

The total fund value of the plan is equal to the sum of the values of the underlying investment funds. The fund value for each investment fund is equal to the number of units you have in the fund multiplied by the unit price at the calculation date.

In the event of a claim, please inform us as soon as possible. To obtain the necessary claim forms and to ensure that all the required information is supplied, contact the Sanlam Life Claims Call Centre at 021 916 1710.

Depending on the nature of the claim, documentary proof (e.g. a death certificate or medical report) will be required.

You can retire from your Sanlam Retirement Annuity at any time from age 55, or earlier in the event of ill-health.

The retirement benefit of the Sanlam Retirement Annuity is equal to the fund value of the plan less the transaction charge, if applicable. If you retire early, the Echo Bonus that is added to the fund value will be lower than it would have been if you had invested until your planned retirement date.

According to current legislation, up to one-third of the retirement benefit may be taken as a lump sum. The balance must be used to provide regular pension payments.

The fund value plus the Echo Bonus calculated to the date of death will be paid either as a lump sum or used to provide regular pension payments.

As required by the Pension Funds Act, the death benefit must be paid to the dependants and the nominees (if appointed) of the life insured. The trustees of the Sanlam Retirement Fund are responsible for allocating the benefit to the dependants and nominees.