South Africa - Personal
Retirement Annuity
The Coronation Retirement Annuity Fund is a personal retirement plan that enables you to save tax-efficiently for retirement. If you are self-employed, it is an ideal way to build a retirement nest egg. Or if you are employed and earn non-retirement funding income*, it can be used to supplement the retirement savings in your existing pension or provident fund.
HOW IT WORKS
You can make lump sum or regular monthly contributions to a retirement annuity (RA) to build up capital that will benefit you in retirement.
Contributions are split into two components, both of which are invested in the same underlying fund/s:
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Two-thirds of each contribution will be allocated to your Retirement Income Component. The savings in this component must remain invested until you retire from the fund (after age 55, or ideally as late as possible) at which point you must purchase a retirement income annuity, referred to as a life or living annuity.
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The remaining one-third of each contribution will be allocated to your Retirement Lump Sum Component. The savings in this component can be paid out as a cash lump sum at retirement (taxed at preferential rates) or accessed earlier (taxed at your marginal rate) in times of financial hardship. You can also leave this component untouched until retirement to supplement your Retirement Income Component, thereby increasing the value with which you purchase your retirement income.
Contributions are also tax-deductible (up to certain limits) and investment returns (interest and dividends) grow tax-free while you remain invested.
The Coronation Retirement Annuity Fund is flexible, cost-effective, and transparent. It is designed to allow you to stop and restart your contributions and/or switch between investment options as your circumstances change. We do not charge initial fees or annual administration fees. The only fees payable are the annual management fees applicable to the underlying unit trust funds selected by the investor.
*Generally irregular and variable income such as commission, performance bonuses and other windfalls that are not used to calculate individual or company contributions to a pension or provident fund.
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WHAT ARE YOUR INVESTMENT OPTIONS
Your underlying investment options are Coronation’s range of top-performing unit trusts. Note that the Coronation Retirement Annuity Fund is required to comply with Regulation 28 of the Pension Funds Act and Exchange Control legislation. This means that the fund requires your investment option to comply with the following limits: a maximum exposure of 75% of the investment amount to equity investments; 45% to international investments; 25% to property.
Investing in Coronation Balanced Plus is the simplest way to achieve that through a single fund that uses Coronation's best investment views for retirement savers. Alternatively you may select from a wide range of Coronation unit trust funds and use our online calculator to ensure that you chose a combination of investment options that complies with these limits.
Coronation Client Services monitor compliance with these limits at the time of your initial investment and on each transaction thereafter.
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All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. As a result thereof, there may be limitations as to the appropriateness of any information given. It is therefore recommended that the reader first obtain the appropriate legal, tax, investment or other professional advice and formulate an appropriate investment strategy that would suit the risk profile of the reader prior to acting upon information. Neither Coronation Fund Managers Limited, Coronation Management Company (RF) (Pty) Ltd nor any other subsidiary of Coronation Fund Managers Limited (collectively “Coronation”) is acting, purporting to act and nor is it authorised to act in any way as an adviser. Coronation endeavours 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. Coronation does 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. Unit trusts should be considered a medium- to long-term investment. The value of units may go down as well as up, and is therefore not guaranteed. Past performance is not necessarily an indication of future performance. Unit trusts are allowed to engage in scrip lending and borrowing. Performance is calculated by Coronation for a lump sum investment with income distributions reinvested. All underlying price and distribution data is sourced from Morningstar. Performance figures are quoted after the deduction of all costs (including manager fees and trading costs) incurred within the fund. Note that individual investor performance may differ as a result of the actual investment date, the date of reinvestment of distributions and dividend withholding tax, where applicable. Where foreign securities are included in a fund it may be exposed to macroeconomic, settlement, political, tax, reporting or illiquidity risk factors that may be different to similar investments in the South African markets. Fluctuations or movements in exchange rates may cause the value of underlying investments to go up or down. The Coronation Money Market fund is not a bank deposit account. The fund has a constant price, and the total return is made up of interest received and any gain or loss made on any particular instrument, in most cases the return will merely have the effect of increasing or decreasing the daily yield, but in the case of abnormal losses it can have the effect of reducing the capital value of the portfolio. Excessive withdrawals could place the fund under liquidity pressures, in such circumstances a process of ring-fencing of redemption instructions and managed pay-outs over time may be followed. A fund of funds invests in collective investment schemes that levy their own fees and charges, which could result in a higher fee structure for this fund. A feeder fund invests in a single fund of a collective investment scheme, which levies its own charges and could result in a higher fee structure for the feeder fund. Coronation Management Company (RF) (Pty) Ltd is a Collective Investment Schemes Manager approved by the Financial Sector Conduct Authority in terms of the Collective Investment Schemes Control Act. Unit trusts are traded at ruling prices set on every day trading. Forward pricing is used. For Domestic Unit Trust Funds and Tax Free Investments, including rand-denominated International Unit Trust Funds, fund valuations take place at approximately 15h00 each business day, except at month end when the valuation is performed at approximately 17h00 (JSE market close). For these Funds, instructions must reach the Management Company before 14h00 (12h00 for the Money Market Fund) to ensure same day value. For Offshore Unit Trust Funds that are denominated in a foreign currency, fund valuations take place at approximately 17h00 each business day (Irish Time) and instructions must reach the Management Company before 12h00 (SA Time) to ensure the value of the same business day. For Retirement Products, fund valuations take place at approximately 15h00 each business day, except at month end when valuation is performed at approximately 17h00 (JSE market close). For these Products, instructions must reach the Management Company before 14h00 to ensure the value of the next business day. Additional information such as fund prices, brochures, application forms and a schedule of fund fees and charges is available on our website, www.coronation.com. Coronation Fund Managers Limited is a Full member of the Association for Savings & Investment SA (ASISA). Coronation Asset Management (Pty) Ltd (FSP 548), Coronation Investment Management International (Pty) Ltd (FSP 45646) and Coronation Alternative Investment Managers (Pty) Ltd (FSP 49893) are authorised financial services providers. Coronation Life Assurance Company Limited is a licenced insurer under the Insurance Act, No.18 of 2017.