If you have a retirement annuity, pension, provident or preservation fund, you may have heard that its investments must be “Regulation 28 compliant”. The phrase concerns how retirement money is invested. It does not tell you what return you will earn.
What is Regulation 28?
Regulation 28 is made under South Africa’s Pension Funds Act. It sets investment-spreading requirements for retirement funds governed by that Act. The purpose is to limit excessive concentration in particular investments, issuers or asset classes. Some statutory funds operate under different legislation; do not assume every arrangement called a pension is governed identically.
The headline investment limits
| Exposure | Broad maximum |
|---|---|
| Equities, including local and foreign shares | 75% |
| Immovable property, direct and indirect | 25% |
| Commodities | 10%; additional sublimits apply |
| Hedge funds | 10% |
| Private equity funds | 15% |
| Cash | 100% overall, subject to issuer and other limits |
| Debt instruments | 100% for debt issued or guaranteed by the South African government; otherwise the overall category limit is 75%, with further sublimits |
| Foreign assets | 45% under the applicable SARB prudential limit |
This is a simplified overview, not the full compliance table. Separate issuer, combined-category and other restrictions also apply. Cryptocurrency investment is prohibited under the regulation. The infrastructure ceiling is 45%, subject to the stated exclusions and rules; it is a ceiling, not a requirement to invest that amount.
These percentages overlap
Offshore describes where an investment exposure sits; equities describes the asset type. A foreign share can count toward both limits. You cannot add 75% shares and 45% offshore to create a 120% portfolio.
For example, a hypothetical portfolio with 40% local shares, 30% foreign shares, 20% local bonds and 10% local cash has 70% equities and 30% foreign exposure. Those headline figures are within the stated ceilings, but they do not prove compliance with every rule or establish that the mix suits you.
Does it prevent losses?
No. Spreading exposure can reduce concentration risk, but a compliant portfolio can still fall in value. Inflation, market movements, interest rates, currency changes and fees remain relevant. A compliant fund is not a capital guarantee.
Nor does a maximum mean a target. A fund is not required to hold 75% shares or 45% offshore. Its actual allocation depends on its mandate and investment decisions.
Which other products are different?
A TFSA, endowment or discretionary unit-trust account is not subject to Regulation 28 simply because it is that type of product. The fund selected inside it may voluntarily follow a Regulation 28 mandate. Other product, tax and exchange-control rules still apply.
A unit trust is not automatically exempt in every setting: retirement funds can invest through unit trusts while remaining subject to retirement-fund compliance. Likewise, a living annuity is a separate post-retirement arrangement; do not assume the pre-retirement limits apply to it in the same way.
What should you ask?
- What does my portfolio actually own?
- How much of its exposure is offshore?
- How does its mix fit my timeframe and future income needs?
- What are the total costs?
- How does it overlap with investments I hold elsewhere?
The useful starting point is your whole financial plan, rather than choosing a product solely to avoid an investment limit.
Explore the related GFS resources
- Retirement Planning Guide — R69.99.
- Retirement Income: Three Capital Examples — Free.
- Retirement Capital Lifetime Explorer — Excel Workbook & Practical Guide — R49.99.
Browse the GFS Product Library for free and paid digital downloads. Prices checked on 28 October 2026; confirm the current price before purchasing.
Your financial adviser should consider your personal circumstances, needs, goals and financial information, explain the benefits, costs, risks and access rules, and discuss the relevant facts carefully with you before recommending whether these products belong in your portfolio.
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General South African financial education only, not personalised financial, investment, insurance, legal or tax advice. Facts checked on 28 October 2026 for the 2026/27 tax year. Provider terms and individual circumstances matter.