Starting and optimising a retirement fund


Planning a pension or provident fund? We think it’s a great idea.

Only around 6% of South Africans retire with sufficient income. Inadequate saving is a major contributing factor. As an employer, you can help address this problem.

A retirement fund is the most tax-efficient savings vehicle. Yes, individuals can access the tax benefit themselves, by investing in an RA. However, most RAs are more expensive, do not offer the same flexibility and are not compulsory. Without the discipline afforded by a compulsory company retirement fund, many investors will fall short, by investing too little, or too late, by incurring too high costs, or by choosing an inappropriate investment portfolio.

More about starting a retirement fund

  1. Legal structure: umbrella or stand-alone?
  2. Product: Pension or provident fund?
  3. Who should be eligible to join? Membership criteria
  4. How much should you contribute? Contribution rates
  5. Should you attach risk benefits to the fund?
  6. Who does what? Service providers
  7. Governance: Board of Trustees and Principal Officer
  8. Specifics: Fund rules
  9. Should you offer investment choice?
  10. Should you offer a preservation fund option?
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The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.


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Related FAQ

Starting a Fund: The preservation fund option

A preservation fund is a retirement fund designed to warehouse the proceeds from previous pension or...

Related FAQ

Starting a Fund: Should you offer member investment choice?

It is becoming common-practice to offer member choice, allowing employees to choose from a selection...

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