Sygnia Retirement Annuity

Minimum contributions:

• Debit order of R500 p/m

You may stop contributing at any time, with no penalty.

Advantages

• Contributions can be adjusted to your changing needs at no cost.
• No fixed set terms.
• Contributions are tax deductible up to a legislated limit.
• All growth is tax free.
• There is no fixed monthly contribution and there is no set term. It’s your investment, so you decide how to invest – lump sum, debit order or both. Your contributions can be adjusted as your needs change at no extra cost.
• You may switch between investment funds available on the Sygnia Alchemy investment platform at any time and at no cost.

Conditions

• You may not cede your investment in the Sygnia RA Fund, nor use it as security for any debts or commitments.
• You may not borrow from your investments in the Sygnia RA fund.
• All investments into retirement funds are regulated by Regulation 28 of the Pension Funds Act, which limits the maximum exposure of your portfolio to various asset classes. To ensure that your retirement product(s) remain compliant, your underlying investments can have a maximum of 75% in equities, 45% in foreign assets and 25% in property. Explore our Reg 28 compliant funds.
• No withdrawals are permitted from the fund before the age of 55 unless:
• Via a Savings Component Withdrawal. This gets processed from the funds in your savings component as per the two-pot retirement system. This is limited to one withdrawal per tax year and is subject a processing fee and tax at your marginal tax rate.
• The total value of all components across all your Retirement Annuity’s with Sygnia is less than R15 000.
• You have financially emigrated for more than 3 consecutive years.

Your contributions to an RA fund, are tax deductible up to a legislated limit, so you may be taxed on a lower taxable -income amount. All growth, including interest income, net rental income, dividend income and capital growth, is tax-free.

The following administration fee applies depending on the investment funds that you have chosen:

* 0.35% (excl. VAT) is levied on the proportionate value of Sygnia unit trust and ETF funds below R2million.
** 0.15% (excl. VAT) is levied on the proportionate value of Sygnia unit trust and ETF funds above R2million.
*** 0.00% (excl. VAT) is levied on the proportionate value of Sygnia unit trust and ETF funds above R10million.

A separate safe custody fee of 0.03% (ex. VAT) per annum applicable to ETFs will be charged.

Note: We consider all your investments when assessing the R2 million and R10 million threshold, including your investments in External unit trusts, ETF’s and ETN’s. For fees relating to the underlying investment managers, please refer to the Sygnia Alchemy Funds document available on request or online at www.sygnia.co.za.

Investment management fees
These vary widely across the Sygnia fund range. For a detailed breakdown of fund-specific fees, please refer to the funds page.

Financial advisor fees
These are negotiable with your financial advisor within the following parameters:

Initial fee: On all products except for the Sygnia Tax Free Savings Account the maximum initial fee is 3%. On the TFSA it is a maximum of 1.5%.
Annual fee: Maximum of 1% per annum (excl. VAT).

If an initial fee in excess of 1.50% is deducted, the annual fee is limited to 0.50% per annum.

• Copy of South African green barcoded ID/ South African Smart ID Card, birth certificate (if minor) or valid passport (if a foreign national).
• Proof of residential address not older then 3 months.
• Proof of bank details not older then 3 months.
• Proof of deposit/transfer into the relevant Sygnia bank account.
• If a unit transfer is required, please provide a recent statement of your current investment.

The Sygnia Retirement Annuity Fund (RA) is an individual retirement savings plan that allows you to save for your retirement in a tax-efficient manner. The Sygnia Retirement Annuity is Regulation 28 compliant and tax-deductible.  All Sygnia products named above and information provided is of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such information or opinion without appropriate professional advice after a thorough examination of a particular situation. We endeavour to provide accurate and timely information, but we make no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information and opinions. We do not undertake to update, modify or amend the information on a frequent basis or to advise any person if such information subsequently becomes inaccurate. Any representation or opinion is provided for information purposes only. Collective Investment Schemes in securities are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. The Manager does not guarantee the capital or the return of a portfolio.

Regulation 28 refers to a section of the South African Pension Funds Act that governs how retirement funds can invest. Its goal is to protect members’ savings by limiting excessive risk and ensuring diversification.

Your underlying investments can have a maximum exposure of 75% in equities, 45% in foreign assets and 25% in property. Our Skeleton Balanced range is Regulation 28 compliant.

Yes, you can hold multiple RAs, but the tax benefit is calculated across all your RA contributions combined – not per individual RA. When you retire, you can only claim the tax-free lump sum portion once, regardless of how many RAs you have.

You can deduct contributions to your RA from your taxable income: 27.5% of the higher amount of your taxable income and remuneration, capped at R350 000.
Please see the below example as an illustration of the tax benefit:

Scenario:

Annual taxable income: R1 000 000

Annual contribution to RA: R300 000

You can deduct up to 27.5% of your taxable income for RA contributions:

27.5% of R1 000 000 = R275 000

So only R275 000 of your R300 000 contribution is deductible in the current tax year.

Note that in this example, contributing R300 000 to your RA will reduce your taxable income by R275 000 for that tax year.

You can make one withdrawal from your savings component per tax year (provided it has a minimum balance of R2 000).
Withdrawals from the savings component are taxed at your marginal tax rate and incur a transaction fee of 2% (excl. VAT), with a minimum of R100 and a maximum of R600 (excl. VAT)

You can access your RA savings if you officially emigrated from South Africa (i.e. your emigration application was approved by the South African Reserve Bank) before 28 February 2022.

You can also access your RA if you haven’t been a South African tax resident for a continuous three-year period starting from 1 March 2021 or later.

The trustees of the retirement fund will refer to legislation to decide who should receive the money.

The trustees will consider:

• Your financial dependants (your spouse, children, or anyone else who relied on you financially).
• Any beneficiaries nominated in your RA.
• If no dependants or nominees are found, the money will go to your estate.

A portion of the payout (up to R500 000) may be tax-free, depending on your previous withdrawals. The balance will be taxed according to the retirement tax table.