Preservation
Fund
Transfer your pension / Provident fund money from your old employer to a preservation fund. One withdrawal allowed, there is no tax and your funds are re-invested for future growth.
Pension/Provident Preservation Fund
A preservation fund is a type of retirement savings vehicle. It allows individuals to preserve and manage their retirement savings when they change employers or leave a pension or provident fund before retirement age.
The primary purpose of a preservation fund is to enable individuals to maintain and continue growing their retirement savings without cashing them out or withdrawing them early. It helps individuals preserve their retirement funds and avoid the negative financial impact of prematurely accessing those funds.
While the primary intention of a preservation fund is to preserve retirement savings until retirement age, there may be provisions for limited access to the funds before retirement. This may include situations such as severe financial hardship, disability, or emigration. However, early withdrawals from a preservation fund typically come with certain tax implications and penalties.
When the individual reaches retirement age, they can typically choose from various payout options for their preservation fund. These options may include receiving the funds as a lump sum, purchasing an annuity for regular income payments, or a combination of both.
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