• Linked Products
• Managed Funds
• Retirement Products

Retirement Products

Recent changes in legislation have enabled linked product companies to compete with life assurance companies in the provision of retirement products. Some of these include the following:

• Retirement Annuities: A retirement annuity is merely a private pension plan. Retirement annuities are recommended for self-employed people or employees who wish to top up any investment made on their behalf by their employer.
• Provident Funds Provident funds, which are invariably defined contribution funds, offer investors the choice of investing a "lump sum" at retirement. This differs from a Pension Fund, where only one third of the capital can be paid out as a lump sum.
• Preservation Funds Preservation funds have been designed for today's working patterns. It has been estimated that on average a working person changes jobs at least seven times. One of the options available to people changing jobs is to invest their Pension or Provident Fund benefits in a preservation fund. A linked investment product preservation fund gives you the option of choosing the underlying unit trust portfolio.
• Guaranteed Income Plans Guaranteed income plans provide a guaranteed income for a specified period. Typically, half the investors' money is invested in an interest bearing account and the balance invested by fund managers in the equity market. In theory, the growth of the unit trust investment will replace the original capital amount at the end of the period.
• Living Annuities Linked living annuities are dependent on the performance of the Johannesburg Stock Exchange and the capital market. Unlike traditional annuities capital does not die with the client. Remaining capital can be bequeathed to heirs. Income drawn by the client is not fixed and can be varied between 5% and 20% of the total annual value of the portfolio.
  
  Clients invest in a range of unit trusts of their choice. The capital amount increases in value in an upswing and decreases in value in a downswing. The underlying investments can be changed as investment conditions change. As with all retirement products, the portfolio is subject to prudential guidelines. This means that only 75% of the portfolio can be invested in the stock exchange. The balance should be invested in bonds, property or other interest bearing investments.