Question:
I have been informed that a Living Annuity can now be invested 100% offshore not 25% as required by regulation 28. Is this true, and where can i find backup documentation?
Answer:
Gray, Owner-managed living annuities are not bound by Reg 28, but if the retirement fund owns the living annuity, then the fund is obliged to follow Reg 28. "Reg 28" refers to Regulation 28 of the Pension Funds Act, so by implication this does not cover member-owned living annuities. However, if your retirement liability is in rand, it is not very prudent to denominate your entire retirement assets in offshore currency, even it seems like a no-brainer right now. Also note that in the context of the "default living annuity" envisaged by National Treasury, the underlying portfolio will have to comply with Reg 28.
