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It is important to bear in mind that any investment has some risk. We therefore recommend that you consult a financial adviser who can help you find the most appropriate products for your needs and circumstances.
Sanlam Cumulus Echo Preservers
Get rewarded with Wealth Bonus if you remain invested until retirement.
About Sanlam Cumulus Echo Preservers
Continue growing the money you have saved so far when you change jobs so that you can continue to look forward to a comfortable retirement.
We add Wealth Bonus to your savings as a reward if you remain invested until retirement. The longer you stay invested, the larger the bonus. With Sanlam Cumulus Echo Preservers, you'll have freedom from concern if you select the Lifetime Investment Option, in which case Sanlam will invest your capital in more conservative funds as you get closer to retirement.
You have the freedom to switch between investment funds as your needs change. You can make four switches free of charge per plan year.
This fund requires:
Minimum payments of R25,000 upfront and any additional contributions must be at least R5,000.
Minimum retirement age of 55 years.
Benefits
You can choose from a wide range of leading investment funds carefully selected by Sanlam.
With the Lifetime Investment Option, your savings are managed by leading asset managers at very low cost, offering you peace of mind for the duration of the investment.
You receive Wealth Bonus, when you retire or terminate the policy. The longer you invest, the bigger the Wealth Bonus
On retirement, you can effortlessly transfer your retirement savings to one of our retirement income solutions.
How it works
Opening a preservation fund is quick and easy:
You choose your retirement age (minimum age 55 years)
The one-off payment is transferred from your existing pension- or provident fund
We invest the money in the underlying investments that you choose with the help of your financial planner.
Your money can grow over time based on your underlying investments.
When you retire you will receive your retirement savings plus your Wealth Bonus. You will be allowed to take a portion of your savings as a lump sum. The remainder must be used to purchase an income-generating product (compulsory annuity) to provide you with an income for the duration of your retirement.
Access to your funds is determined by the Two-Pot System, which came into effect on 1 September 2024. In summary, the retirement savings in your preservation fund are divided into 3 components, and each component gets treated differently at retirement.
If you pass away before you retire, your savings plus the Wealth Bonus will be available to your dependants. The trustees of the fund will take into account your wishes and all your dependants' needs to decide who receives this benefit.
Access to your money
Access to your money is determined by the Two-Pot System, which came into effect on 1 September 2024.
The retirement savings in your preservation fund are divided into 3 components, and each component gets treated differently.
Vested component: You are allowed to make one withdrawal before retirement. Access is also possible in the case of emigration (three years cessation of tax residency), disability or death
Retirement component: No access at all, except in the case of emigration (three years cessation of tax residency), disability or death, subject to the applicable fund rules.
Savings component: You can make one withdrawal per tax year, subject to taxation in terms of the individual income tax table. The value of the withdrawal must be at least R2 000 before costs, but there is no maximum withdrawal value
- When you retire
When you retire, the Wealth Bonus will be added to your retirement savings. You will be allowed to take a portion of your savings as a lump sum. The remainder must be used to purchase an income-generating product (compulsory annuity) such as Investment-linked Living Annuity, our Investment-linked Lifetime Income Plan or a Life Annuity. These aim to provide you with an income for the duration of your retirement.
Access to your funds is determined by the Two-Pot System, which came into effect on 1 September 2024. Read more about the Two-Pot System here.
In summary, the retirement savings in your preservation fund are divided into 3 components, and each component gets treated differently at retirement:
Vested component: Benefits in the vested rights portion* of this component will be available as a lump sum (subject to taxation), as an annuity, or as a combination. Benefits in the non-vested rights portion* are subject to the purchase of a compulsory annuity (to provide you with an income during retirement) with at least two-thirds of the value. *Members who were previously members of a provident fund, may have both a vested and non-vested rights portion inside their vested component
Retirement component: All benefits must be used to purchase a compulsory annuity to provide you with an income during retirement.
Savings component: You can take the full amount as a lump sum, or use it to purchase a compulsory annuity.
If the full value of the retirement component + two-thirds of the non-vested rights portion in the vested component is equal to or less than R165 000, the full value of the retirement component and the non-vested rights portion of the vested component may be taken as a taxable cash lump sum.
When you retire you will receive your retirement saving plus the Wealth Bonus. You can take up to one third of your savings plus the Wealth Bonus in cash. The balance must then be reinvested in an annuity to give you a monthly income.
If you saved in a provident fund or preservation provident fund, you may be able to take more than one third of your savings in cash. The treatment of your retirement benefits is based on whether the benefits have vested rights attached to them or not. Read here for more information in that regard
If the value of your retirement savings is equal to or less than R247 500, you will be able to take the full amount in cash at retirement.
If you choose to take some money out, you can consult your financial planner to continue exposing that money to the markets in an investment product that provides access to your money at any time.
- Tax
At retirement there is no tax on the amount transferred to a post-retirement product that provides you with an income during your retirement.
You don’t pay tax on any interest or dividends
No CGT is applicable
What is taxable?
There is tax on any portion of your retirement savings that you withdraw in cash when you retire
There is tax on any withdrawal benefit
- Fees
Fees vary per product and your underlying investment. Please speak to your financial planner to make sure you understand which fees you pay and why.