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.