Changing jobs creates a retirement-fund decision even when you are not trying to access cash. The key question is where your accumulated retirement savings should sit after you leave the old employer.
Three routes commonly considered
New employer fund
Consolidates retirement savings with your new workplace arrangement. Compare investment choices, costs, fund rules and benefits.
Preservation route
Keeps qualifying retirement money invested outside the old employer fund, subject to the chosen vehicle’s rules and costs.
A third possibility is remaining as a paid-up member of the old fund if the fund allows this. The right route is not automatically the same for every person.
Questions worth asking
- What are the total ongoing costs?
- What investment portfolios are available?
- How much flexibility will I have before retirement?
- What happens to the Two-Pot components on transfer?
- What death-benefit and beneficiary rules apply?
- Will consolidating make my retirement plan easier to manage?
Avoid accidental cashing out
When changing jobs, complete the exit forms carefully. A direct transfer between approved retirement funds can have a very different tax outcome from first receiving taxable cash personally.
SARS — Retirement Lump Sum Benefits
SARS — Two-Pot tax implications
South African Government — Two-Pot retirement system
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