Emigrating - can I take my pension funds?

A Fin24 user who is emigrating wants to know the legalities around his retirement savings. He writes:

I have worked in SA for the past 14 years and have pension as well as retirement and annuity savings with Momentum.

I will be relocating permanently to another country.

Can I withdraw all my funds and relocate with them? What does the law say?

Soré Cloete, legal manager at Old Mutual, responds:
 
Yes, you may withdraw these funds subject to certain conditions.
 
Pension fund

If you resign from your job, this will allow you to access your pension fund.

You will be able to withdraw the full amount in your pension fund, if the rules make provision for this.   
 
Retirement annuity

The income tax legislation allows you to access the funds in your retirement annuity (RA) before the age of 55, if you formally emigrate from South Africa and the emigration is recognised by the South African Reserve Bank for exchange control purposes.

The rules of your particular RA fund also have to make provision for withdrawing upon emigration.
 
The funds you receive from the pension fund and the RA will be taxable in your hands as a withdrawal benefit. 

The tax implications on the total amount received from the pension fund and the RA (provided you have not received any retirement benefits before, and have not had any disallowed contributions to any of these funds) are set out in the table below.



The after-tax amount received (from the pension fund and RA) will form part of your emigration allowance (currently R4m for individuals). If the amount is less than this, you may take it in full.

 - Fin24

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