Withdrawal Benefits

Your withdrawal benefit will depend on which part of the Fund you belong to. Let’s take a look.

If you belong to the Defined Benefit section, (Part I) of the Fund, your total retirement savings is calculated by the Actuary. 

 

 

 Part II: Defined Contribution Pension Fund

If you belong to the Defined Contribution section (Part II) of the Fund or the Provident Fund, your total retirement savings is split as follows:

Vested pot: “OLD” savings up to 31 August 2024	Savings pot: “EMERGENCY” money – only for emergencies!	Retirement pot: NO TOUCHING
You may withdraw the full balance.	You can withdraw the full balance, but only once per tax year unless your savings pot is less than R2,000, in which case you can withdraw the full amount.	You cannot make withdrawals from this pot. This money must be used to purchase an annuity when you retire, unless the amount is less than R165 000, in which case you can take it in cash.
This benefit will be taxed in line with the tax table for withdrawal.	Any withdrawals from this pot before retirement will be taxed at your marginal rate – in other words, the same rate as your income.   At retirement, it will be taxed in line with the retirement tax tables.	The annuity that you buy will be taxed as and when you receive your monthly pension income, in line with the tax tables for retirees.

 

When you leave the ISASA Retirement Fund, you have several options available to you regarding your accumulated benefits. These options provide you with flexibility and financial security based on your individual circumstances.

Transfer Options:

You can transfer your savings from this Fund to the following Funds:

• Retirement Annuity (RA)
• Preservation Fund
• Your New Employer’s Fund

They will  remain in the same pot as in the ISASA Retirement Fund, or you can transfer the Savings Pot and Vested Pot into the Retirement Pot in the new fund, but beware, you can never transfer it back to the Savings or Vested Pot.

Pot in the ISASA Retirement Fund	To which pot can it be transferred to in the New Employer’s Fund, Retirement Annuity or Preservation Fund
Savings Pot	Savings Pot or Retirement Pot
Vested Pot	Vested Pot or Retirement Pot
Retirement Pot	Retirement Pot

 

Interschool Transfers:

Should you transfer to another school participating in the ISASA Retirement Fund, the full value of your accumulated credit will be transferred to your new school’s account, ensuring uninterrupted membership and benefits.

Cash Withdrawal (BUT BEWARE THE CONSEQUENCES):

You can only withdraw the Vested Pots and Savings Pot in cash. This is subject to taxation and may significantly reduce your retirement savings and future tax concessions.

Taking cash on withdrawal before retirement will also make it difficult for you to meet your retirement goals. Talk to a financial advisor before you take your money in cash.  Click here if you need a financial advisor.

 

In-Fund Preservation:

If you choose to remain a Preserver member within the Fund:

• Your benefits will continue to be invested, benefiting from favourable investment fees.
• You will not make further contributions.
• Insured benefits such as death, disability, and funeral cover will cease.
• You will continue to enjoy the governance and management of the Fund without incurring commissions or upfront investment fees typically associated with external preservation options.

• Divorce Orders: If there is a Divorce Order against part of your Scheme benefit, the Scheme must settle the value of the order before paying any benefits to you.
• Home Loans: If you have a Housing Guarantee provided by the Scheme, the outstanding value will be deducted from your withdrawal benefit before any part is paid out.

 

Always speak to a financial planner before making any decisions on what to do when you exit the Fund.

 

Click on the image below to view the Withdrawal Fact Sheet