The product, called Optimus Master Pension Plan, has been designed using the Isle of Man pension rules and is aimed at South African nationals.
According to the firm, the product has no limits on how much and how often contributions can be made, although South African residents are subject to exchange controls – with the current allowance permitting ZAR10m (£577,882, $733,095, €733,095) foreign investment contributions per year.
Other features of the plan include no donations tax on contributions, tax free growth and return on contributions, ability to accept contributions from family trusts, multi-currency investment opportunities and drawdown from age 50.
“We have listened to what our intermediaries, advisers and clients required and built the product accordingly” said Optimus director Martin Hall.
“It has been designed to incorporate highly flexible investment and benefit features which can be tailored to how each member wishes to accumulate and use their retirement funds.”
Hall adds that although it is currently aimed at South African nationals, the firm may look to offer it to expats settled in the country at some point in the future.
Clampdown on offshore funds?
The launch comes just weeks after Optimus director Martin Hall told International Adviser that South African tax authorities may clamp down on the way overseas pension products are taxed.
A report published in April by the country’s prominent Davis Tax Committee (DTC), which reviews South Africa’s tax system, urged the country’s revenue service to investigate the taxation of offshore retirement funds.
As a result, Hall said South African Revenue Service (SARS) may bring in reforms to offshore retirement funds which means they are no longer exempt from the 20% estate duty which applies to assets with a net value in excess of ZAR3.5m, including all worldwide assets.
Such funds may also lose their exemptions from donations tax, an IHT charge of 20% on gift payments over ZAR100,000.
“There is currently a lot of concern in South Africa regarding the future value of pensions especially with the rand showing a 30% depreciation last year” said Mark Schofield, managing director of Optimus.
“We have created a product that amongst other benefits can protect a member’s assets, is fully compliant and has taken note of the recent Davis Tax Committee (DTC) report.”
