You can switch providers

If you buy a living annuity, you do not have to stay with the same product provider throughout your retirement; you can switch your annuity to another provider.

Just chief executive officer Deane Moore says that if you invest in the Lifetime Income Fund and switch from the Sygnia ForLife living annuity to another product provider, you may be able to switch your underlying investments in the Lifetime Income Fund, depending on the investment platform.

However, currently you can make an initial investment in the Lifetime Income Fund only through a Sygnia ForLife living annuity. in hybrid products have often been costly inflation-linked ones.

The income guaranteed by the Lifetime Income Fund will increase over time in line with investment-market returns.

Moore says the fund aims to grow the income in line with the inflation rate, but the increase is not guaranteed or fixed, as it would be if you bought an inflation-linked guaranteed annuity.

The investment required to buy a pension with an increase that targets the inflation rate, but where the increase is linked to investment-market returns, is typically 30 percent lower than the cost of a pension guaranteed to increase in line with inflation. With the Lifetime Income Fund, the returns are linked to the returns earned by Sygnia’s Skeleton Balanced 70 index-tracking fund.

The investment will be available from March 1 to living annuitants who invest in the Sygnia living annuity using a financial adviser.

Anderson says the Sygnia ForLife living annuity will in future be made available to retirement funds as their default annuity.

The Lifetime Income Fund may also in future be made available through Sygnia’s robo- adviser ( internet- based advice offered through an online app).

laura.dupreez@inl.co.za