Law when resigning and pension

Magandroid

Magandroid

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Recently a friend and I were having a discussion about him thinking of leaving SA and emigrating to another country. As the discussion continued the issue of his work pension came up. Should he resign his current employement, is there a law that states that you have to move you pension another pension fund or RA? Or can you just deposit it into a normal bank account?
 
Magandroid said:
Recently a friend and I were having a discussion about him thinking of leaving SA and emigrating to another country. As the discussion continued the issue of his work pension came up. Should he resign his current employement, is there a law that states that you have to move you pension another pension fund or RA? Or can you just deposit it into a normal bank account?
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If he wants to do that, he'd have to do it fast. New laws are coming into play next fiscal year to prevent people resigning to dip into their pension. Now I'm not entirely sure what comes into play with emigration though. It will be taxed as income if he does iirc.
 
gertvanjoe said:
If he wants to do that, he'd have to do it fast. New laws are coming into play next fiscal year to prevent people resigning to dip into their pension. Now I'm not entirely sure what comes into play with emigration though. It will be taxed as income if he does iirc.
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Source?
 
gertvanjoe said:
If he wants to do that, he'd have to do it fast. New laws are coming into play next fiscal year to prevent people resigning to dip into their pension. Now I'm not entirely sure what comes into play with emigration though. It will be taxed as income if he does iirc.
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Thanks for the feedback. At this stage he only recently started considering the idea of emigration. There's still lots he has to take into account before making the final decision to proceed.
 
My understanding is:
First 500K is tax free. Remember this is over your lifetime.
The rest you put in a Capital preservation fund, where it continues to grow. Or you purchase a living annuity.
 
LPCPT said:
My understanding is:
First 500K is tax free. Remember this is over your lifetime.
The rest you put in a Capital preservation fund, where it continues to grow. Or you purchase a living annuity.
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The R500k is tax-free only on retirement at age 55+ or retrenchment, not resignation.
 
LPCPT said:
My understanding is:
First 500K is tax free. Remember this is over your lifetime.
The rest you put in a Capital preservation fund, where it continues to grow. Or you purchase a living annuity.
Click to expand...

Not if resigning or normal fired. Retrenched or retiring, yes.
 
supersunbird said:
Many articles have been written, here is but one (there are concerns part will be made unavailable on resignation):

businesstech.co.za

Concerns over proposed retirement bill in South Africa

Efforts to reform South Africa’s complicated retirement savings landscape are forging ahead with the aim to ensure better retirement outcomes in the future.
businesstech.co.za businesstech.co.za
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Thanks, it seems like the date has been moved to 1 March 2024. Also there's the question around vested funds, ie. what you've already accumulated at the start of the implementation date, seems like you will have full access to that, or am I misunderstanding?

Chong, however, expresses concern that the “vested pot” will remain fully accessible to workers.

“The ‘vested pot’ which are existing vested rights or interests in pension and provident funds on the implementation date, however, remain fully accessible on resignation.
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