South African retirement annuity funds rules for expats

On home soil your options are limited, but once you emigrate, you’re entitled to cash in and transfer your retirement annuity funds abroad. Here’s what expats need to know about how the South African retirement annuity fund rules can work in their favour.

What do expats need to know about South African retirement annuity fund rules?

When it comes to saving for your retirement, the golden rule is to treat as untouchable those funds that you accumulate for your so-called golden years. So much so, that the law even enforces this golden rule by preventing South Africans from accessing their retirement savings before the age of 55. Every rule has exceptions, however, and the exception to this particular rule comes in once you’ve left the motherland.

Emigration is the key to accessing your South African retirement annuities, thereby enabling you to convert your savings to cash and transfer the proceeds abroad. The catch? There is no catch save for the fact that you must comply with your retirement annuity fund rules and meet the exchange control rulings laid out by the South African Revenue Services (SARS) and the South African Reserve Bank (SARB) by completing the process of financial emigration.

What is financial emigration?

Financial emigration isn’t as daunting as it sounds. It’s simply the process by which you will, as a South African resident, exit the country financially from an exchange control point of view.

This process does not result in the loss of your South African citizenship, all it means is winding up your estate for emigration purposes by declaring your assets to the Reserve Bank in order to get their permission to transfer your assets to another country.

• The proceeds of your retirement annuity, even before maturity date
• Your South African source inheritance and the proceeds from any third party life policy to which you are a beneficiary
• The proceeds of assets and wealth declared to SARB in your emigration application
• Any passive income you earn (rental income, company dividends, directors’ fees or salary for services rendered in SA, as well as trust income).

What can South African expats do with their retirement annuities?

South Africans living abroad can turn their retirement annuities into cash and transfer these funds to their new home. The best part about transferring the proceeds from cashing in your South African retirement annuity is the fact that once it’s done, it’s your money.

There are no rules, laws or regulations that will force you to do anything that you don’t want to. Whether you want to spend this money, save it or reinvest it elsewhere, the choice is yours to make.

How do I go about cashing in my South African retirement annuity?

To gain access to the funds you’ve saved for retirement, you need to undertake retirement annuity surrender which requires financial emigration. However, this is not as simple as it sounds.

Thanks to the involvement of so many different administrative entities – SARS, SARB, your banking institution and your retirement annuity fund’s specific rules, cashing in your retirement policies in accordance with exchange control rulings can be complicated. Because failure to comply with exchange control rulings can lead to criminal liability, it’s worthwhile to bring in the experts to assist with financial emigration. Choosing a partner like FinGlobal is a smart move, because we can handle:

• The surrender of retirement annuities, preservation funds and similar pension products
• The acquisition and submission of claims or other administrative documents to insurers, SARS, SARB and banking institutions
• Tax refunds and exemptions relative to the surrender of certain policies
• The surrender of other insurance products with an investment value
• Full financial emigration service with transfer of retirement annuity funds offshore before age 55.

By giving you all the facts and making sense of all the numbers for you, we give you everything you need to make an informed decision on your options for turning your retirement annuity funds into cash. We’ll handle the paperwork and make sure you jump through all the correct administrative and legislative hoops.

As a fully compliant financial services provider we can transfer the proceeds of your pension, provident or preservation funds abroad which will help you hit the ground running in your new country by providing smart financial planning services and meeting your day-to-day foreign exchange requirements.

What’s the first step in transferring a South African retirement annuity abroad?

Simply make the first move by getting in touch with us to discuss how we can help make your financial transition easier and leave the rest in our capable hands. Why? Because we’ve already done it for thousands of clients living in over 105 countries with our end-to-end expat financial services and we’d love to give you the same convenient experience.