Resignation and Dismissal Benefits

When exiting the MGF before retirement, the benefit is a lump sum equal to your total Fund Credit.

A benefit payable from your Savings Pot on resignation or dismissal is taxed at your marginal tax rate.
A benefit payable from your Vested Pot is taxed according to the following fixed scale:

This applies to the aggregate of resignation or dismissal lump sums received after 1 March 2009.  This means that you cannot get R27 500 from the MGF and R27 500 from the next fund you join. Both benefits will be added together and only the first R27 500 will be tax free. The balance will be taxed according to the above scale.

Any resignation, dismissal or retrenchment benefit previously received tax-free (including any tax-free amount received from your Employer as a severance package), as well as tax-free portions for amounts paid out after 1 March 2009 in respect of divorces or maintenance orders, will be added to the lump sum prior to applying the table.

The following applies for each of category of your retirement savings at resignation or dismissal:

Note: If you were 55 or older on 1 March 2021 (i.e. you were born before 1 March 1966) and have been a member of the SAB Provident Fund since then, your options are slightly different, unless you opted in to the Two-Pot System. You may take the full withdrawal benefit in cash, subject to tax in line with the tax table for withdrawal.

When you resign or are dismissed you have the following options:

• Leave your money in the Fund (deferred pension) until you elect to withdraw or retire at a later date
• Take a portion of your money in cash (but beware of the tax that you will have to pay)
• Transfer your money to a new employer's pension/provident fund
• Transfer your money to a retirement annuity or preservation fund

______________________________________________________________________________________________

Retirement Benefits Counselling 

You have free access to a counsellor who can explain the options you have when you resign or retire from your employer. The counsellor does not give advice, but rather information about retirement planning matters in simple and straightforward language.

Sanlam Benefit Counsellors

Toll-free number: 0800 111 956

WhatsApp or phone: 0861 223 646

Email: advicereferral@sanlam.co.za 

INFund Solutions

Phone: 012 880 5983

Email: mgf@infund.co.za