Dipping into your pension

Unfortunately, you can only withdraw your full fund after three years of non-tax residency. Here's why.

- Charize Beukes

The question: I plan to quit my current job and move overseas permanently sometime next year. I have a pension built up with my current employer (currently around R1.2 million). Can I withdraw it all and leave with whatever is left after being taxed, or are there other limitations?

The answer: There are a few key considerations when it comes to withdrawing retirement funds after emigrating from South Africa. Let's break it down, especially in the context of pension funds, the three-year lock-in rule, and the living annuity restriction.

1. The three-year lock-in rule (Section 10cB of the Income Tax Act)

As of 1 March 2021, South African tax laws were amended to include a three-year lock-in rule for members of preservation and retirement annuity funds (including pension funds not yet converted to annuities).