Absa launches low-cost life-stage retirement product, accessible directly on-line.  


Balancing income and risk appetite in low-cost passive structure beats SA’s high retirement saving cost

Today the Corporate and Investment Banking division of Absa Bank Ltd (Absa) member of Barclays, launched its low-cost retirement annuity which is based on life-stage investment philosophy. The Absa Retirement Annuity Fund: Core Portfolio or the Core Retirement Annuity, allows members to benefit from increased income generated by higher risk while young, and automatically reducing risk and consolidating gains as members approach retirement age.

The Core Retirement Annuity provides diversified exposure to multiple asset classes such as domestic and international equity, property, fixed income and money market. The risk associated with the investment is automatically adjusted according to the investor’s life stage.

“Younger investors, for example, whose primary objective may be to build their wealth, will have a greater exposure to risky assets such as equities. Exposure will automatically reduce as the investor approaches retirement and their emphasis shifts to protecting their retirement nest egg,” explained Vladimir Nedeljkovic, Head of Exchange Traded Products at the Corporate and Investment Banking division.

Since the portfolio is built from passive building blocks - exchange traded funds, investment costs are very low, approximately 0.51 – 0.55% per annum (all inclusive). Moreover, contributions are tax deductible by up to 15% of non-pensionable income, returns on investment are tax free, and, at retirement, a significant portion of the lump sum pay-out is also not taxed.

Also, with a minimal lump sum investment of R10 000, or a recurring debit order of only R500 per month, almost anyone can participate, making the Core Retirement Annuity ideal for people who:

• Are self-employed and do not belong to a pension or provident fund; • Are employed, but not provided with an employer-provided pension fund; • Receive a salary and wish to make additional provision for their retirement years; • Wish to reduce their tax liability; • Seek to invest in a flexible retirement savings vehicle and/ or • Wish to make lump sum investments and / or recurring contributions to a retirement fund.

On retirement, members may take up to one-third of the retirement benefit proceeds available in cash, of which a portion may be received tax-free. Any additional contributions that the member may have made that did not qualify for tax deduction at the time may be added to this tax-free portion. The balance of the retirement benefit proceeds must be used to purchase a compulsory retirement annuity, drawdowns from which are subject to normal tax.

“The Core Retirement Annuity is designed to help South Africans to better save for their retirement by making the investment process simpler and more convenient, and significantly reducing the investment costs.

This product is accessible to all existing and potential Absa customers via Absa’s internet banking portal –” concluded Nedeljkovic.

More information about this and other passive investment offerings by CIB can be found on


For more information please contact:

Stuart Meyer
FTI Consulting
+27 11 214 2408
+27 83 618 7260

Further information:

Graeme Coetzee
Marketing and Corporate Communications
Barclays Africa Group
+27 11 895 6695
+27 79 695 9798

About Corporate and Investment Banking at Barclays Africa

Corporate and Investment Banking, a division of Absa Bank Limited a member of Barclays, is a leading South African corporate and investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.

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