If you’re a South African living abroad—or planning to relocate—you may be wondering what happens to the retirement savings South Africa has helped you build. A common question is: “Can I transfer my South African retirement annuity to a pension fund?” The short answer: not directly. But there are ways to access, optimise, or withdraw your retirement savings, especially if you’ve completed tax emigration.
Here’s what you need to know about retirement fund withdrawal, expat pensions, and managing your South African retirement annuity fund from abroad.
Can you transfer a retirement annuity to a pension fund?
Under South African law, you cannot transfer a retirement annuity to a pension fund—whether locally or internationally. That’s because these funds are governed by different rules under the Pension Funds Act, and the system doesn’t allow a direct shift between fund types.
While Section 14 transfers may allow movement between retirement annuity funds or into preservation funds, they do not apply to foreign pensions. So if you were hoping to transfer your pension abroad into a UK SIPP, a Canadian RRSP, or an Australian super fund, it’s not possible as a direct transaction.
However, there are still several viable options.
What are your options for retirement savings when emigrating?
Depending on your circumstances, particularly your age and South African tax residency, you have a few different paths to consider.
1. Withdraw your retirement annuity after tax emigration
If you’ve formally ceased tax residency South Africa, you may be eligible to withdraw your retirement annuity before age 55. This is possible after you’ve maintained non-resident tax status for at least three consecutive years.
Withdrawing pension funds in this way offers flexibility: you can access your funds, settle any pension tax South Africa that might apply, and then choose to transfer your money overseas into a foreign pension or other investment vehicle.
This strategy is increasingly common among South Africans abroad seeking control over their expat pension plans and pension money in South Africa.
Read more: Cashing in your SA retirement annuity – your options before and after emigration.
2. Consider a section 14 transfer (in certain cases)
If you’re not yet ready to emigrate or withdraw your annuity, a Section 14 transfer might be an interim solution.
What is a Section 14 transfer?
A Section 14 transfer, as defined under the Pension Funds Act (1956), allows you to move your retirement savings in South Africa from one registered fund to another, such as:
- From one retirement annuity fund to another
- From a pension fund to a preservation fund
These transfers are subject to approval by the Financial Sector Conduct Authority (FSCA) to ensure that your rights as a fund member are protected.
- Section 14 pension funds act transfers are tax neutral.
- Ideal for consolidating or switching to a better-performing fund.
- You cannot transfer your pension abroad through this mechanism.
- Must comply with fund rules and FSCA approval.
While it won’t give you access to your money right away, a Section 14 transfer can help you optimise your South African pension holdings in the meantime.
3. Withdraw your retirement annuity, then transfer overseas
Once you’ve completed tax emigration and successfully executed a retirement annuity withdrawal, your funds are unlocked and can be moved abroad.
This allows you to:
- Invest in a foreign pension tailored to your new home country
- Supplement your expat income
- Allocate funds to more tax-efficient overseas pension structures
Popular options include:
- Transfer overseas pension to UK (e.g. to a QROPS or SIPP)
- Overseas pension transfer to Australia (into a complying super fund)
- Foreign pension transfer to RRSP (for expats in Canada)
Top tip: Always assess pension transfer tax implications in both South Africa and your destination country.
Tax considerations for expats when making decisions about retirement savings after emigration
In South Africa:
- Tax on retirement funds is determined by SARS’ lump sum tables (rates from 18%–36%).
- After ceasing tax residency in South Africa, you’re exempt from worldwide income tax, but using your retirement fund lump sum withdrawal benefit will still be taxed locally.
- Drawing down as an annuity may trigger income tax on retirement benefits.
Abroad:
- Foreign pension tax may apply in your new country.
- You may need to declare your payout as expat income under expat tax South Africa or foreign rules.
- Use double tax agreements (DTAs) to avoid double taxation.
Read more:
- Expert insights – when is the right time to surrender your retirement annuity?
- Tax on retirement annuity withdrawal in SA – what expats need to know.
Should you withdraw your retirement annuity?
If you’ve emigrated—or plan to—the option to withdraw your retirement annuity offers real advantages:
- Access funds before 55
- Invest abroad with more flexibility
- Align your savings with your global life goals
While you can’t transfer your retirement annuity to a pension fund, withdrawing pension funds after emigration is a smart and strategic way to take control of your wealth.
FinGlobal: retirement annuity encashment specialists
You cannot transfer your South African retirement annuity to a pension fund, but that doesn’t mean you’re stuck. Whether you’re planning or already living abroad, understanding your options helps you unlock the full value of your retirement savings in South Africa.
Ready to explore your options? Let’s talk. We’ll guide you through the full retirement annuity withdrawal process—from tax emigration to fund payout—ensuring compliance and tax efficiency every step of the way.
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