Preservation Funds

A preservation fund may suit you if:
1. You want to preserve your provident or pension retirement savings.
    Specifically when you change jobs, are retrenched or your employer closes shop;
2. You receive a pension interest in a divorce order. 

The transfer to the preservation fund is tax-free.
This means you keep the tax benefits of the original fund.

It makes sense to preserve. Compared to taking a cash payout.
A payout causes much harm to your retirement savings. 
Not only will you have to start over.
Also, you will miss out on the full power of compounding growth.
Further, the cash payout reduces your tax-free benefit at retirement.

A preservation fund allows you to invest in unit trusts.

You may nominate beneficiaries. No estate duty payable.

Protected from potential creditors:
You cannot transfer or pledge your preservation and,  
You cannot use your preservation fund to secure a loan.

You may make one withdrawal before retirement.

There are two types of preservation funds:
Provident and pension preservation funds.

A difference is how much cash you may take when you retire, after age 55.

Provident preservation fund:
You may take your total benefit as cash.
If you take a part, the rest must be used to purchase a product for a pension.

Pension preservation fund:
You may take a maximum one-third in cash.
The rest must be used to purchase a product for a pension.

The rules of your original fund determine your access.
Before and at retirement.

You may access your preservation fund before 55 if:
You are permanently disabled
You emigrate

Again, the transfer is tax-free and it makes sense to preserve for further growth.