PPS has communicated to members of the PPS Sanlam Retirement Annuity (administered by Sanlam) to inform them that they have the option to transfer their retirement annuity to the unit-trust based PPS Investment Platform. If this transfer is done before 13 April 2020, they will also waive the administration fee on PPS Investments for a period of time.
The attractiveness would be that you have full transactional reporting, various investment options as well as potential fee savings. 

We’ve highlighted three areas to consider before making changes to your portfolio:

1. Your current portfolio may be grandfathered.
This means that it does not comply to investment restrictions which limits your exposure to offshore investments, property and equities. As soon as you make changes to your portfolio you will have to comply with regulation 28. If you have a portfolio with more than 30% offshore exposure or more than 75% exposure to equities, please consider the move carefully.

2. The Transfer Penalty Still Applies
When you request a transfer from an insurance-based RA to a unit-trust based RA, they typically have to recoup costs that have already been paid out to advisors as well as other marketing fees. These penalties can range up to 25% of your fund value and will still be applicable on your transfer to another provider.

3. Compare the Fees
You are able to request a statement called the EAC Statement (Effective Annual Cost) which breaks down the fees you pay for investments, advice, marketing and other fees over 1 year, 3 years, 5 years and until the end of your investment term. You can then easily compare this to the costs of the new portfolio to determine if the savings would out weight the potential penalty.

We have streamlined the process to weigh-up the pro’s and con’s of moving your retirement annuity by accessing information in real time from the providers. Please feel free to contact us if you’d like to discuss this in more detail