A Coggle Diagram about Features (DC/DB. Board of trustees. Benefits paid when employee leaves employer, dies or retires., Contributions (not premiums) are usually tax incentivised., DC employees choose their own investment portfolio., Retirement reform wants to eliminate differences between Pension and Provident Funds., When the employee leaves or is retrenches the whole benefit from pension/provident can be taken as a taxable lump sum. This is being investigated by the National Treasury (retirement reform). and Invested in same assets as individual investors, but regulation 28 limits exposure to certain asset classes. Insurance products invested in needs to comply with Reg 28.), RA (Scheme with a board of trustees and a set of rules., Benefits are purchased from a life insurer who administers the fund. What do they do?, Benefit = Retirement income of which 1/3 can be commuted to cash. May also include death/disability benefits., Benefits cannot be surrendered but can be transferred to another provider. and Can have a guaranteed annuity option to convert maturity proceeds of the RA into a life annuity at guaranteed terms.), Pension (2/3 must be annuitised and Max 1/3 can be taken as cash), Risks (Market risk is similar to individual policies with similar investment choices. and Operational risk is an expensive risk on retirement business and results from miss-administration (investing incorrectly).), Provident (Benefits can be taken as cash.), These funds have Tax benefits and Pension and Provident fund regulated by the Pension Funds Act. Life insurers can administer pension and provident funds. They can also offer investment products and insurance portfolios to the funds. These funds can be self-administered.