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Be physically and financially fit  

Invest in our uniquely designed low-cost Core Retirement Annuity

South Africa has one of the highest cost bases for retirement savings in the world. Layers of administration fees, management and platform fees eat up a significant portion of your investment returns. That’s why we bring you the Core Portfolio, a low-cost retirement annuity (RA) solution based on life-stage investing.

Application is via Absa online (AOL), Here you can also manage your debit orders you set-up, view statements online and perform a review on your current retirement inputs.

Transfers from other approved Pension, Provident and Retirement Annuity Funds to the Core RA are done manually by filling out the transfer sections of the manual application form and sending it to aimscc@absa.co.za.
These are transferred free of tax per current legislation.

90%
of retirees will not have enough money to maintain living standards
  • What is a Retirement Annuity Fund (RA)?
      • A retirement annuity is a tax-efficient savings plan towards your retirement.
      • You can choose to make once-off lump sum payments, monthly contributions or a combination of the two.
      • You can only access your retirement annuity savings at age 55, except in certain situations like permanent disability, emigration or the fund value being less than R7 000.
  • Benefits
      • Simplicity and convenience: Automatic portfolio rebalancing based on the predefined investment methodology. Automatic risk reduction as you near retirement.
      • Easy to transact and manage: Simple online application process, investment tools, statements on demand, investment review on demand (recommended once a year).
      • Low investment costs: Portfolio building blocks comprise low-cost passive investments (exchange traded funds and notes).
      • Transparency: Full disclosure as to where your money is invested.
      • Tax benefits: Contributions are tax-deductible by up to 27.5% of your remuneration or taxable income (whichever is greater between the two) on all contribution to retirement funds, combined. Return on investment is tax-free and at retirement a significant portion of the cash sum is available tax-free.
  • Tax advantages
  • Fees
    • There are two components to the annual fees charged:

      1. Product fee: 0.28% - 0.33%

      This is the wieghted sum of all the Total Expense Ratios (TERs) of the underlying ETFs. This fee will change slightly over time, because the underlying funds have different TERs and their weightings will change over time.

      2. Platform fee: 0.228%

      This is the annual administration fee charged by Absa Investment Management Services (AIMS).

      Total annual fees

      The product and platform fee brings the total costs to 0.50% - 0.56% p.a. (incl. VAT), well below the industry average.

  • It's the ideal product for you if
      • You want to top-up your pension or provident fund*.
      • You're self-employed.
      • Your employer does not provide a pension or provident fund.
      • You wish to reduce your tax liability.
      • You are looking for a low-cost retirement solution.
  • How the Core Portfolio works
      • You will be placed into an asset allocation that is based on your length to retirement (life stage) according to information you provide on your current age and expected retirement age, i.e. if your current age is 52 and your expected retirement age is 65, you will have 13 years until your expected retirement age and will be placed in asset allocation category 6 (10 to 15 years until retirement).
      • If you are still far from retirement, you will be placed in a portfolio with greater allocation to shares (equity). In the long run, this asset class typically produces higher returns and should recoup any short-term losses incurred by the higher risk.
      • The opposite is true the closer you are to retirement as the emphasis is now on protecting your retirement nest egg.
      • Your RA will automatically be adjusted every year in line with the asset allocation that corresponds with your retirement life stage.
  • Retirement calculator
  • Cost Matter

South Africa has one of the highest cost bases for retirement savings in the world. Layers of administration fees, management and platform fees eat up a significant portion of your investment returns.

These fees' importance is often overlooked because it is difficult to visualise the difference that one per cent of additional fees can make during the life of an investment - especially for long-term investments like a retirement annuity.

The calculator below illustrates how fees can affect your end of period value.

Years to retirement

Annual fees

Average industry fees Projected industry end of period value Core Portfolio fees Core projected end of period value

This calculator is for illustrative purposes only and it does not constitute investment advice.

The cost matter calculator estimates the investment returns eaten away in fees by comparing Core Portfolio fees and Average Industry fees




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Absa RA: Core Portfolio fees

Portfolio 1 2 3 4 5 6 7 8
Years to retirement 35+ 30-35 25-30 20-25 15-20 10-15 5-10 0-5
Annual fee 0.50% - 0.55% (Incl. VAT and TER)

Please note: This product is currently open to individual investors only

Copyright 2013 Corporate and Investment Banking, Absa. All Rights Reserved. Corporate and Investment Banking is a division of Absa Bank Limited, Reg No. 1986/004794/06. Authorised Financial Services Provider. Registered Credit Provider Reg No NCRCP7.