Preservation Funds

When you make a career move or accept a severance package, you'll soon have to decide what to do with the accrued benefits in your pension or provident fund: do you invest this money in your next business venture? Spend it on a car or holiday? Or do you wisely preserve it for its original purpose - your retirement?

The sensible investment option would be to leave your accrued retirement benefits until you retire.  AMBITON’s experienced team will assist in making the most worthwhile investment choices.

It is important to note that a transfer to a preservation provident fund must be from a provident fund and a transfer to a preservation pension fund must be from a pension fund.  On retirement from  a preservation provident fund, you may take the full benefit as a lump sum.  With the preservation pension fund, you may take up to one-third of the full benefit as a lump sum.  Lump sum benefits are taxed according to a special rates table for retirement and may have a portion that is tax-free.  A compulsory life annuity must be purchased with the remaining two-thirds in the case of the preservation pension fund and the income of this life annuity is fully taxable.