Absa Preservation Fund

Absa Preservation Fund, How It Works & Requirements

Most South Africans do not know about the Absa preservation fund. If you are among that percentage, then check out this article.

A preservation fund is a flexible and cost-effective product that provides you with a reliable and transparent way for greater financial independence at retirement age.

This product helps you to protect your retirement savings in a tax-efficient way.

We will show why you need this fund.

Why You Need Absa Preservation Fund In South Africa

If you have at least R25 000 in retirement savings, you should consider getting a preservation fund.

If you are in the process of leaving your current employer and are afraid to lose your retirement savings, you need to get a preservation fund.

If you want to protect your pension or provident fund savings, then you are the ideal investor for this fund.

These are some reasons why you may need an Absa preservation fund in South Africa.

Absa Preservation Fund

The product helps you grow your retirement savings in a tax-efficient way even after leaving your current employer.

You have control over pension benefits before you retire.

The fund offers you flexibility in constructing and adjusting your retirement portfolio by providing various investment options like ETFs, CIS, Wraps, and share portfolios.

The fees for this account are transparent, and on top, you will receive quarterly reporting on your portfolio’s holdings, values and transactions.

This fund ensures an easy transition into a retirement income solution on the platform.

The fund has a long-term investment until retirement age which in most cases is 55 years.

This is how the Absa preservation fund works in South Africa.

What Are The Options

The pension preservation fund allows you to take a third of the investment value as lump sum payment subject to tax at retirement.

You can invest the remaining two-thirds into a retirement income solution.

You can cash out the total investments if the amount is less than R247 500.

The provident preservation fund allows you to take the full vested interest portion of the investment value as lump-sum payments subject to taxation at retirement.

Only one-third of the non-vested investment can be taken as a lump sum, and the rest must be used to purchase a compulsory income product.

If the non-vested interest is less than R247 500, the amount can be paid out as a lump sum.

This is all you need to know about Absa preservation funds in South Africa.

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