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Changing jobs and your pension fund options

Changing jobs and your pension fund options

People change jobs and move from one company to another for various reasons and each company move requires you to manage your pension fund or provident fund but what are the implications when you change jobs before retirement age and what is the best way to ensure that your tax liability is minimised.

If you under retirement age and were contributing to a pension fund/provident fund and your new employer also has a pension fund/provident fund.

You are able to transfer the full amount into the new pension fund or provident fund tax free

If you under retirement age and were contributing to a pension fund and your new employer does not have a pension fund/provident fund.

You are able to transfer the full amount into the new preservation fund tax free

You are able to transfer to a retirement annuity fund tax free

This scenario assumes that you wish to continue saving for your retirement and do not wish to access any cash and we strongly recommend that you do not retire from the fund unless it is absolutely a matter of life or death simply because you do not want to leave yourself lacking when you do retire and that you will be taxed at the maximum tax rate for early withdrawal. By preserving your pension fund/provident fund the tax liability is deferred until retirement and the tax rate will be lower.

Other considerations

If your new company does not have a pension fund or provident fund and you access a private pension fund the management fees will be higher and hence your return is likely to be lower.

If you stay with your new employer until retirement age

A provident fund allows you to make a single partial or full withdrawal at retirement age.

A pension fund allows you to withdraw a maximum of 1/3 cash withdrawal and the 2/3 balance must be invested in a retirement annuity.

A preservation fund allows you a single or partial withdrawal before retirement age. If you reach retirement age you will have to buy an annuity.

For a lot of people the “preservation fund” option is most desirable as it offers greater flexibility.

21 Responses to “Changing jobs and your pension fund options”

  1. Michael says:

    Hi

    I want to know about my funds who are suspending from masakhane provident fund to sentinel my pension fund membership number is 33810780.So i want to know how much amount is being outstanding.

  2. botle says:

    How and where do i find out what happened to my pension or provident fund from previous employer.

  3. what is my deemed retirement age – if I belonged to a fund where retirement is 65 can and have chosen to no longer work can I opt for the 300k tax free option as apposed to the withdrawal option at 18%

  4. Jeffrey says:

    Am I
    allowed to claim part of my provident before my retirement age and

    • admin says:

      Hi Jeffrey, yes you are able to withdraw prior to retirement but there are tax implications to consider. Please contact your fund administrators for more information.

  5. Jeffrey says:

    Am I allowed to claim my provident fund before my retirement

  6. allen viviviers says:

    How long do u guys take to pay out a providentfund I’m waiting almost 4weeks now tanx

    • admin says:

      Hi, please direct your inquiry to your fund administrator by searching for the fund name in the search box above (blue strip) This will give you the fund administrators.

  7. timothy maile says:

    ‘ive changed work from as far back as in the 70’S and are as follows Jardin des mode ,Tedro Products Pharmacyticals,MNS ELECTRONICS and I finally ended up working for CNA GALLO GROUP

  8. allen viviviers says:

    My administraters says 45days wil it maybe be before 45days?or on the 45th day

  9. Emmanuel says:

    Hi, is it possible to lend money from the providend fund?

  10. masobawe teise says:

    I just want to check my resignation benefit

  11. Kaamiela Job says:

    I wold like to speak to a representative that can assist me with the process to withdraw my pension please

  12. Phindile says:

    Hi I would like to know abt my provident fund of 2006, was working for a diamond polishing company, did not claim after resigning, now I want to claim it, what and how can I do it.thanks

    • admin says:

      Hi please use the search box in the blue strip at the top of the page to search for the fund name or company name. This will tell you the fund administrators name and contacts. You must then contact them

  13. I want about provident fund which I was working at whytes engineering now am at AZ Armaturen and here am contributing on pension fund is money being transferred too pension fund

  14. Thembalesizwe says:

    I want to know how much do I HAVE in my provident fund.
    and can i make cashwithdrawal by the end of the month? please reply.

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