Results 1 to 8 of 8

Thread: Are double penalties on RA's legal?

  1. #1
    Gold Member Houses4Rent's Avatar
    Join Date
    Mar 2014
    Location
    Cape Town
    Posts
    761
    Thanks
    7
    Thanked 55 Times in 51 Posts

    Are double penalties on RA's legal?

    I wonder whether any of you had goen through this before.

    I and my wife had some old style RA's. I was new in the country and invested in them to the max as I thought its a good idea to reduce our taxable income by 15%. I call them old style, because back then before Rob Rusconi blew the whistle on the RA scheme the penalties were not regulated yet. Since then several layers of protection have been implemented for all newer policies and the penalties are far less severe.

    So when I understood what Rob was explaning and due to personal circumstances I made our RA's paid up. We had to bite the bullet and pay the penalty. Terrible, but we will life. However, their performance is still a joke and I now learnt that I can actually transfer them to something different as long as the new investment vehicle it complies with some rule/section 28 of some whats_the_name pension act. If I do that they want to slap me with yet another round of penalties which I do not deem correct nor fair.
    Does anybody know more about and how to fight thhe second penalties? The only avenue I haev in midn is the Ombudsman, but they often are a toothless body in my understanding. Is there maybe some case law?
    Houses4Rent
    "We treat your investment as we treat our own"
    marc@houses4rent.co.za www.houses4rent.co.za
    083-3115551
    Global Residential Property Investor / Specialized Letting Agent & Property Manager

  2. #2
    Gold Member Houses4Rent's Avatar
    Join Date
    Mar 2014
    Location
    Cape Town
    Posts
    761
    Thanks
    7
    Thanked 55 Times in 51 Posts
    420+ views and no comment. Is my situation really so unique? Has really nobody ever experienced this problem in one way or another? Are there no financial advisors or similar on this forum who have a higher chance to have come across this situation?
    Houses4Rent
    "We treat your investment as we treat our own"
    marc@houses4rent.co.za www.houses4rent.co.za
    083-3115551
    Global Residential Property Investor / Specialized Letting Agent & Property Manager

  3. #3
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    It's easy to comment - e.g . "These penalties are ridiculous!"

    It is another thing completely to give a constructive answer to the question you pose.
    The trouble with opportunity is it normally comes dressed up as work.

  4. #4
    Gold Member Houses4Rent's Avatar
    Join Date
    Mar 2014
    Location
    Cape Town
    Posts
    761
    Thanks
    7
    Thanked 55 Times in 51 Posts
    Ahm, I was looking for constructive answers. I thought that was obvious. Looks like nobody has the problem I have.
    Houses4Rent
    "We treat your investment as we treat our own"
    marc@houses4rent.co.za www.houses4rent.co.za
    083-3115551
    Global Residential Property Investor / Specialized Letting Agent & Property Manager

  5. #5
    Email problem Rafael's Avatar
    Join Date
    Oct 2012
    Location
    Johannesburg
    Posts
    129
    Thanks
    8
    Thanked 29 Times in 20 Posts
    I'm not always on the forum and I have just seen this.

    Yes there are double penalties.

    Did you decrease your contributions or did you make your retirement paid up. What was the percentage of the penalty
    Are you doing a section 14 transfer?
    How old are you and what are the current fund value amounts.
    You stated that your investment is not doing well, why not change the funds that it is currently invested in? This will avoid penalties.


    You can inbox me the answers of you feel comfortable

    The current maximum penalty is 15% for RAs.

    What you can do is e-mail the actuarial department of whoever is administering the fund and explain that you have been penalized when you reduced the contributions, and ask for an explanation of why you being penalized again and if they can reduce the penalty.
    You miss 100% of the chances you never take

  6. #6
    Email problem Rafael's Avatar
    Join Date
    Oct 2012
    Location
    Johannesburg
    Posts
    129
    Thanks
    8
    Thanked 29 Times in 20 Posts
    Hi Houses4Rent

    as discussed over the telephone, here is some information with regards to the Statement of intent

    http://www.iol.co.za/business/person...7#.U2eQW6JjFqw
    and
    http://www.moonstone.co.za/consumer-....NwPLgQO4.dpbs

    For everyone else who may have a future problem with regards to this.

    The FSB signed in a regulation that states:
    RA products sold before January 1, 2009, the penalties would be limited to 30 percent
    RA's sold after January 1, 2009, the penalties would be limited to 15 percent.

    Hope you find the above useful
    You miss 100% of the chances you never take

  7. #7
    Gold Member Houses4Rent's Avatar
    Join Date
    Mar 2014
    Location
    Cape Town
    Posts
    761
    Thanks
    7
    Thanked 55 Times in 51 Posts
    Thanks so much Rafael, appreciated. That gives me a much better footing.

    Mine was bought way before 2009 so its 30% for me.

    You mentioned on the phone an accumulative 25% cap fro penalties on the phone regardless of policy age, sale date and paid up date. Are the 15%/30% over writting that? Or is that something completely different?

    Marc
    Houses4Rent
    "We treat your investment as we treat our own"
    marc@houses4rent.co.za www.houses4rent.co.za
    083-3115551
    Global Residential Property Investor / Specialized Letting Agent & Property Manager

  8. #8
    Email problem Rafael's Avatar
    Join Date
    Oct 2012
    Location
    Johannesburg
    Posts
    129
    Thanks
    8
    Thanked 29 Times in 20 Posts
    Hi Marc

    To my knowledge is was 25% but I may have been incorrect.
    You miss 100% of the chances you never take

Similar Threads

  1. Replies: 3
    Last Post: 31-May-12, 04:10 PM
  2. Double tube Double headscratch
    By mikilianis in forum Electrical Contracting Industry Forum
    Replies: 4
    Last Post: 14-Apr-11, 06:38 PM
  3. Statutory adjustment from an employee - legal or not legal?
    By peanuts in forum Labour Relations and Legislation Forum
    Replies: 1
    Last Post: 16-Feb-11, 12:12 PM
  4. interest and penalties
    By murdock in forum Tax Forum
    Replies: 2
    Last Post: 04-Jun-08, 03:07 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •