Question:
My husband had an Old Mutual RA which we stopped contributing to when he lost his job. We would like to resume the payments. How do we go about doing this?
Answer:
Tazz,
As you took out an Old Mutual RA, this will be a life company retirement annuity, which is underwritten and subject to a long-term contract or policy.
When your husband stopped contributing to the retirement annuity, the retirement annuity would have been deemed "paid-up". You may have incurred a "termination penalty" at that point, to recover outstanding upfront costs incurred by Old Mutual. This policy is effectively closed, so you cannot resume making payments to that same retirement annuity policy. More likely, you would enter into a new retirement annuity with that company, and transfer the balance of your paid-up retirement annuity to the new retirement annuity.
If you had taken out a so-called "new generation" retirement annuity with an asset manager (such as 10X), which is not in the form of a policy, then you would probably be able to resume contributing to your existing retirement annuity.
In the event you paid termination fees or penalties on making your first retirement annuity paid-up, you now risk paying these same costs again on your new RA (recovered monthly/deducted from your investment balance). You should try to avoid these costs by engaging directly with the service provider, so that you do not re-incur upfront costs (eg broker commissions). Again, this is possible with new generation retirement annuities, but not with a life company retirement annuity (which are only sold through financial intermediaries).
