The Stanlib Classic Preservation Fund is a retirement product designed to safeguard and grow existing retirement savings. To activate the product, a minimum lump sum injection of R25,000.00 is required.
Investing in the Stanlib Classic Retirement fund qualifies for either the Classic Preservation Pension Plan or the Classic Preservation Provident Plan. The purpose of the preservation plans is to protect the value of the pension or provident funds.
The Stanlib Classic Preservation Fund requires an entry age of 18 years, making it appropriate for people who are resigning, being retrenched, or whose retirement fund is closing.
By investing in the Stanlib Classic Preservation Fund, the investor becomes a member of the fund, which has over R22 billion in investments. The investor will have complete control over their investment in the fund and will be able to invest in a variety of unit trusts.
There are no guarantees with a Stanlib Classic Preservation Fund investment. As a result, money invested in the fund may lose value from time to time. However, investment in the fund has increased significantly over the years.
In 2021, the fund increased by 4.1%, which was one of the fund’s worst performances due to COVID. As of 2023, the fund has a 5-year average yield of 6.5%. Through these facts, the fund has managed to outperform the market in many ways, even in tough economic situations.
The Stanlib Classic Preservation Fund comes with interesting features for a preservation fund, which we discuss below:
The Stanlib Classic Preservation Fund requires investors to transfer R25,000.00 in retirement savings from their existing pension or provident fund. This fund assists investors in tax-efficiently increasing their pension or provident fund.
The Classic Preservation plan from Stanlib offers tax-free investment returns. This includes dividends and interest income earned from investing in various unit trusts. Returns on investments can be capitalized to increase future earnings.
Investors who invest in the Classic Preservation Fund can switch from one fund to another at no additional cost. This allows the investor to capitalize on market inefficiencies and increase the value of an investment over time.
The plan also provides benefits for those who are disabled or incapacitated and unable to work. In this case, an investor can apply for early retirement and gain access to their preservation fund. The fund requires investors to access their preservation fund at any age starting at 55.
At the age of 55, the policyholder has the option of withdrawing the entire amount from the preservation fund. Alternatively, the policyholder can withdraw a portion of the fund or choose not to withdraw at all.
There is also the possibility that an individual will die before their preservation fund is depleted, in which case Stanlib has provided a safety net for investors. Investors can nominate beneficiaries who will get access to the preservation fund should the member die. The beneficiaries will be apportioned the remaining sums in the fund according to their share percentage.
The Stanlib Classic Preservation Fund is available in two forms, depending on the source of funding. A Classic Preservation Pension Fund investment can be made to preserve a pension, while a Classic Preservation Provident Plan investment can be made to preserve an existing provident fund.
Funds become available for both classic preservation provident and pension plans at the age of 55. For the classic preservation provident fund, the policyholder can withdraw all or part of the cash on the plan as a lump sum and invest the remainder in a living annuity, or invest the entire amount in a living annuity.
In contrast, a classic preservation pension plan allows the policyholder to withdraw up to one-third of the policy amount and invest the remainder in a living annuity at retirement, or to invest the entire amount in a living annuity.
The decision on what to do with the money from the preservation fund is up to the investor, who must also adhere to the fund’s guidelines. A preservation fund will expire when the investor reaches the age of 55. Therefore, depending on the preservation plan chosen, some or all of the investment can be withdrawn or invested in a living annuity.
Individuals who are leaving a provident fund or pension fund should consider investing in the Stanlib Classic Preservation Fund. The fund can provide investors with the opportunity to invest in a variety of assets from various investment firms.
The Stanlib Classic Preservation Fund is simple to apply for because it is available online. However, one should be concerned about what will happen to their principal and investment earnings when they retire, and should consult with a financial advisor before investing.
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