Sygnia Living Annuity

Minimum contributions:

• Initial lump sum of R100 000
• Additional contributions are permitted from another approved retirement fund upon retiral from the approved retirement fund. Transfers from another living annuity are permitted if the anniversary month, payment rate and payment frequency are the same as your Sygnia Living Annuity account.

Advantages

• No set term.
• Flexibility to invest in a wide variety of cost-effective unit trusts, ETFs and unitised life funds.

Limitations

• You may not cede your investment in the Sygnia Living Annuity, nor use it as security for any debts or commitments.
• You must nominate the level of income you wish to draw from your accumulated capital. Current legislation requires that you select an income of between 2.5% and 17.5% of your capital every year. You may receive your income monthly in arrears, quarterly in advance, half yearly in advance or annually in advance. You may change the level of income to be drawn and the frequency of receipt on the anniversary of your investment each year.

Your Sygnia Living Annuity will be subject to the following taxes:

• Once you invest your capital in a living annuity, all taxable growth, including interest income, net rental income, dividend income and capital gains, is tax free.
• All annuity payments are subject to tax in accordance with prevailing income tax legislation.
• Sygnia will issue you with a tax certificate on an annual basis.

Sygnia will provide you with an annual IRP5, which details the total interest and dividends earned for the tax year. You are required to declare these amounts on your annual tax return. The dividend income earned is subject to Dividends Withholding Tax (DWT) at a rate of 20%. The South African Revenue Service requires Sygnia to pay DWT on your behalf where applicable.

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 than 3 months.
• Proof of bank details not older than 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.

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. 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. The Sygnia living annuity is underwritten by Sygnia Life Limited, a registered insurer licensed to conduct investment-linked life insurance business in terms of the Long-Term Insurance Act, 1998 and the Insurance Act, 2017, as applicable.

You can transfer your existing living annuity to the Sygnia Living Annuity without incurring any fees or penalties from Sygnia. Check with the transferring fund if they will charge any transfer/exit fees.

Please take note of the timelines when processing your transfer.

The capital growth and interest earned on your investment are not taxed, but payments from the Sygnia Living Annuity to you are considered income and are subject to income tax in accordance with current tax laws.

Regulation 28 of the Pension Funds Act does not apply to living annuities, as the product is governed by the Long-Term Insurance Act. As our life license has reached its maximum capacity, however, Sygnia has a 40% offshore allocation.

You can withdraw an income between 2.5% and 17.5% of your total investment value. This range is set by legislation to give your retirement savings a good chance of lasting through your retirement. You can choose a percentage or a rand amount, provided the rand amount is within the prescribed limits.

The frequency of payments can be monthly, quarterly, half-yearly or annual.

You can adjust the income percentage, rand amount and payment frequency once a year on your investment anniversary, as your financial needs require.
You can specify which funds your income should be drawn from (but living annuity income payments can only be withdrawn from unit trust funds and unitised life funds).

Annuity payments cannot be reinvested into your annuity, as legislation stipulates that annuity income must be paid into the investor’s bank account.

If you do not require the annuity payments, consider the following options:

• Adjust the withdrawal amount on your anniversary date to the minimum 2.5%.
• Reinvest the funds into other investment vehicles, such as a Sygnia Direct Investment or Sygnia Tax-Free Savings Account.
• It may be beneficial to consult with a financial advisor to explore strategies that align with your financial situation and objectives.