Chapter 6: Personal Investment in South Africa Flashcards
1
Q
The incentives for individuals are:
A
- Contributions are granted tax relief at the investor’s marginal tax rate
- Taxable investment income and capital gains within the fund are taxed at a preferred rate. (In the 2007 budget this was set back to zero.)
- Part of the fund may be taken as a tax-free lump sum on retirement.
- Life insurance can be provided from contributions to the fund. The death benefits are used to enhance the amounts received by the dependants of a deceased member.
2
Q
The withdrawing pension fund member can decide to:
A
- Leave the money in the pension fund (f the pension fund provides for “paid up” membership).
- Transfer the reserves to a new pension fund.
- Transfer the withdrawal benefit to a preservation account.