The Sanlam Umbrella Fund has recently completed a review of its Trustee Endorsed annuity strategy.
The current annuity strategy:
Members who have retired from employment with a member share less than R100 000 can choose to purchase the institutionally priced Out-of-Fund Guaranteed Annuity. Members with a Member Share of R100 000 or more can choose to remain in-fund by electing to purchase the Trustee Endorsed in-fund living annuity (Regulation 39 compliant), the Extended range in-fund living annuity or the Out-of-Fund Guaranteed Annuity.
Annuity strategy following the review:
The minimum member share required to become an in-fund living annuitant of the Fund has been increased to R500 000, this change will take effect on 1 April 2025.
Members who have retired from employment with a member share less than R500 000 can choose to purchase the institutionally priced Out-of-Fund Guaranteed Annuity. Members with a Member Share of R500 000 or more can choose to remain in-fund by electing to purchase the Trustee Endorsed in-fund living annuity (Regulation 39 compliant), the Extended range in-fund living annuity or the Out-of-Fund guaranteed annuity.
This is the first increase in the product minima for the in-fund living annuity since this product’s launch in 2015. A key reason for the increase is the extra governance costs associated with in-fund living annuities.
So as not to impact retiring members who have been planning based on the current product minima, any in-fund living annuity applications received before 1 July 2025 will be accepted based on the current product minima.
Under both the current and revised annuity strategy, members can also choose not to utilise the trustee-endorsed annuity options and instead purchase any retail annuity of their choice offered by any annuity provider.
A reminder that the Fund’s annuity options remain cost-effective options for members, with significant savings compared to retail annuities. Members may also appoint an accredited financial adviser who can earn advice fees which will be deducted from their member share.