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Commutation


Taxreform

Commutation of Benefits

There are changes from 1 March 2016 (T-day), on how much of your retirement benefit you can access as a full cash lump sum at retirement.

  • The minimum rand threshold (commutation threshold) at which you can take your retirement benefit as a full cash lump sum will be increased from R75 000 to R247 500 for all retirement funds.

  • This means that if your retirement benefit is R247 500 or less, you will be allowed to take your full benefit (commute) as a cash lump sum. You will not be required to buy an annuity with at least two-thirds of this benefit.

  • This will apply to all types of retirement funds.

  • In the case where a person is already receiving a monthly annuity payment, that person is currently allowed to commute their annuity to a cash lump sum payment if the total value of their annuity is R75 000. Subject to confirmation from SARS it is anticipated that from T-day this amount will be also be increased to R247 500.


   
 





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