How transfers of retirement annuity contracts have changed
Since 1 March 2023, the law prescribing the transfer of a contract from one retirement annuity fund to another has changed.
Before this date, you had to transfer all your contracts from one retirement annuity fund to another. You couldn’t transfer only one contract if you had two contracts in the same retirement annuity fund.
What has changed?
If you have more than one contract in a retirement annuity fund, you may transfer one or more of those contracts to a new retirement annuity fund and leave the rest in the existing fund, subject to certain minimums.
The partial transfer is allowed if:
- The value of each transferred retirement annuity contract is more than R371 250.
- The total value of the remaining retirement annuity contracts is also more than R371 250.
How it works
For example, a member has three contracts:
- Contract 1 - R400 000
- Contract 2 - R300 000
- Contract 3 - R200 000
The member will be entitled to transfer contract 1 to another retirement annuity fund because the value of that contract is more than R371 250, and the total value of the remaining two contracts is also more than R371 250.
The member would not be entitled to transfer only contract 2, only contract 3 or both contracts 2 and 3 to another retirement annuity fund because the value of each transferred contract (individually) is less than R371 250.
You may not transfer a part of an individual contract to another retirement annuity fund - if, for instance, you have two contracts:
- Contract 1 - R1 200 000
- Contract 2 - R800 000
You cannot transfer only R600 000 of contract 1 to another retirement annuity fund; you will have to transfer the entire R1 200 000 of contract 1 or the entire R800 000 in contract 2 to another retirement annuity fund.
Retirement annuity withdrawals and tax implications
No minimums apply if you transfer all your contracts from one retirement annuity fund to another.
The transferring retirement annuity fund must complete a separate tax directive application for each transfer.
The minimums apply only to transfers between retirement annuity funds and shouldn’t be confused with other minimum amounts regarding retirement funds:
Before retirement- Retirement annuity fund paid-up withdrawal
At retirement- Retirement benefit
After retirement- Living annuity withdrawal
* SARS – South African Revenue Service
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