The Perpetual Annuity – changes due to COVID-19
The Perpetual Annuity is underwritten by Old Mutual Alternative Risk Transfer Ltd
The South African Government has recognised the needs of retired investors during the COVID-19 crisis and is temporarily allowing living annuity clients to change their income limits in order to access or preserve funds for a limited period of 4 months, from 1 June 2020 to 30 September 2020. The amended regulations and relevant options are explained below:
Temporary income draw-down limits: minimum 0.5% to maximum 20%
Regardless of when your anniversary month is, you can make use of these temporary income changes for 4 months:
- You may reduce your income to a minimum of 0.5% to prevent selling off capital unnecessarily.
- You may increase your income to a maximum of 20% to assist if you need additional income.
- From October 2020, your income will change back to your income selection prior to these temporary amendments.
- If your anniversary month is in June, July, August or September, you may also make use of the temporary income limits being offered until the end of September. This change would be made in addition to submitting your anniversary instruction (which should reflect an income option of between 2.5% and 17.5%).
- To benefit from these changes for the full 4 months, instructions need to reach us by 22 June 2020.
We recommend you consult a financial adviser to make sure you understand the impact of changes on your investment and take into consideration the following excerpt from the Association of Savings and Investment South Africa media release:
"Our concern is for those living annuity investors who opt to increase their drawdown rates, as this is likely to erode a capital base already under severe strain due to the market volatility. Withdrawing a larger portion of your retirement capital should be an absolute last resort which is implemented only once you have completed a full analysis with your financial adviser to assess the long-term impact on your retirement capital."
Should you decide to make use of the temporary income levels, please submit your instruction to Marriott as follows:
- Complete the Temporary Income Percentage Change Form if you would like to make use of the temporary income limits. Please note that this form only allows for percentage income changes in line with the temporary limits described above. All other changes to your Perpetual Annuity investment do not form part of the temporary income change option and therefore must be completed on a Policy Review Form.
- Complete the Policy Review Form to submit your anniversary instruction. Please also use this form for any other changes you wish to make to your Perpetual Annuity investment. Regular anniversary instructions and investment changes can also continue to be submitted using Online Investing, available via www.marriott.co.za
New commutation threshold for living annuities (permanent change to the regulations)
You may withdraw the full value of your investment if it is R125 000 or below, irrespective of whether you have taken a cash withdrawal at retirement or not.
If you require further information, please email us on firstname.lastname@example.org and a Client Relationship Consultant will be able to assist you. Alternatively, please contact your Financial Advisor.
The Marriott Team