Hollard Living Annuity

The Hollard Living Annuity is an investor-owned compulsory annuity policy intended to provide a regular, non-guaranteed income to you when you have retired from a Retirement Fund.

Any monies invested in Retirement Fund products are eligible to be invested into the Hollard Living Annuity when you retire from the Fund, subject to the rules of that Fund and any applicable legislation. This includes Pension and Provident Funds, Retirement Annuity Funds and Preservation Funds.

The minimum initial amount required to open an Investment Account is R165, 000.

Current legislation requires that you select an annuity income of between 2.5% and 17.5% of the value of your investment account each year. You can specify your annual Annuity Income as a Rand amount or as a percentage of the value of your investment account. This can be amended annually as at the Anniversary Date of the policy.

You may choose from a monthly, quarterly, bi-annual, or annual payment.

You will only be able to adjust your annuity income amount and payment frequency once a year on the day of the year that the policy started, known as the policy Anniversary date.

Income tax will be deducted from your annuity income before it is paid out to you, in accordance with Income tax legislation. Tax will be deducted according to the relevant SARS PAYE tax scales by default. Should you wish for a different tax rate to be applied, you may supply a tax directive from SARS to this effect. The investment is not subject to Capital Gains Tax, Interest Income tax, or Dividend taxes.

You can select from the range of Unit Trust Funds. You may select any one of them or a combination of them. You may also switch between funds at any time. It is your responsibility (in consultation with your Financial Advisor) to ensure that the Annuity Income level of your Living Annuity relative to the performance of your selected Investment Portfolios is sustainable for the rest of your life.

No, the right to benefits may not be ceded or pledged.

No, due to the nature of the product, you may not cancel, and no cooling-off period applies. You may transfer your investment to another Living Annuity offered by an approved insurer.

No, the product does not provide a guarantee on the investment value of your investment account, nor does it guarantee the performance of the investment. The market value of the investment may fluctuate at any time. The investor carries the investment and market risk, which may include the possibility of losing capital.

Yes, you may invest additional monies into your Hollard Living Annuity, provided it originates from an approved Pension Fund or Retirement Fund. The anniversary date of your portfolio will remain unchanged, and you will not be able to adjust your annuity income level until the next anniversary date.

You may not withdraw from your Living Annuity, unless the value of the investment is below a legislated minimum amount, in which case a full withdrawal may be requested. Income tax will be deducted from the withdrawal before it is paid out.

Hollard Life will allocate any benefit due to the Nominated Beneficiaries as specified on the policy. Should there be no beneficiaries on record, any benefit will be paid to the deceased estate of the investor. The benefit due on the death of the investor is the value of the investment at the time of processing the death claim, less any fees and charges. Each beneficiary who has been awarded a portion of the death benefit will be provided with the benefit in one of the following ways:

• The purchase of a compulsory annuity from Hollard Life or another registered long-term insurer
• A cash lump sum pay-out
• A combination of compulsory annuity purchase and a cash pay-out
• The purchase of an accelerated annuity is to be paid over a minimum term of 5 years. For minors, the minimum term will be the greater of 5 years or the number of years to the age of 18. Any benefits taken in cash will be subject to income tax

It is recommended that you appoint a financial advisor to assist you. Hollard Life in their capacity as the Administrator and the Manager don’t provide financial advice and may only supply factual or administrative information relating to the investment products and portfolios.