A Preservation Fund is a retirement fund that allows you to continue to preserve and grow your retirement savings until you retire .It  is a tax saving vehicle that allows you to save towards your retirement when you change jobs, or retirement schemes and resign

Preservation Fund Rules

  • You are only allowed one withdrawal should you urgently need money due to a life crisis.
  • You cannot make withdrawals before the maturity date (usually 55 years old)
  • If you withdraw from your retirement savings you are not allowed to transfer the balance to a preservation fund.
  • A preservation fund does not allow you an option to make additional contributions once you change jobs.
  • Upon retirement only one-third of your total RA value can be taken as a cash lump sum, of which a portion may be tax free. The remaining two-thirds must be used to purchase an annuity that will provide you with a regular income

Who is it applicable to?

Individuals that want to save their investment proceeds after changing jobs and have to move to a different pension fund

Why preservation fund? The main objective of the preservation fund is to increase wealth to sustain you to live comfortable once you retire.Investment returns compound overtime and this can transform your retiremnt savings into big amounts after a specified period of time.

How to invest? You can only transfer your original pension fund lump sum once to a new preservation fund.

How many preservation funds can you invest in? You cannot use the same preservation fund should you change jobs .There is no stipulated limit of funds that on can invest in

What happens with my preservation fund upon retirement?When you retire you have the option to withdraw one third of your invested capital in cash. The remaining portion must be used to purchase a life or living annuity.

Benefits of a Retirement Annuity

Cost efficiency: You do not have to pay tax when you withdrawing from an existing fund and transfering to a preservation fund.You do not pay tax on the returns earned by your preservation fund

Investment choice and Flexibility  An investor can manage their portfolio or consult a financial advisor to mantain the preferred investment portfolio. The selection of the preferred investment portfolio must however be compliant to regulation 28 of the pension funds act. Vista will assist with this.

Insolvency protection: Should you be declared insolvent your preservation fund is secure and cannot be linked to creditors.


Your preservation fund investment is not guaranteed as the value is affected by market returns of the underlying securities. One needs to consult with a financial advisor to avoid taking on high risk and to help them make an informed decision. The value of your contributed capital may decline due to negative market  returns of the underlying securities.There is no guarantee on performance of your investment

The fund should comply with regulation 28.

You can’t pay any extra contributions into the preservation fund

What are the conditions on retirement from the preservation fund? 

When one retires between the ages of 55 and 70

If one retires due to disability before the age of 55

If one is permanently disabled and not working




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