In a pension fund one is allowed to take a maximum of 1/3 of your savings in cash. The remaining 2/3 must be used to purchase an annuity.
Prior to 1 March 2021, it differed in that when you resigned or retired, you could take the entire sum as cash, which you’d be taxed on. You wouldn’t need to purchase an annuity. With the retirement reforms introduced from 1 March 2021, provident funds are now more similar to pension funds in that fund members are required to take a third of the benefit as a lump sum and they must use the remaining two thirds to buy a pension that provides a monthly income.
Retirement annuity fund
Contributions towards a Retirement Annuity is completely independent from your employer. When you retire, at age 55 or older, you’re allowed to take a maximum of one third as a cash lump sum from your retirement annuity. The balance must be used to purchase an income annuity.
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