In general, the South African retirement savings landscape is straightforward, with a small number of options on offer. Despite this, stark contrasts between payment rules have resulted in many employers maintaining multiple plans.

Provision of occupational pension plans is typically on a defined contribution basis through a pension fund or a provident fund. Revised rules seek to dismantle the divergence in benefit payment options (for most employees). New legislation essentially prescribes that provident fund accruals after 1 March 2021 are payable in the same manner as pension funds. This limits lump sum benefits to one-third of total savings (where total savings are at least equal to ZAR 247,500), with the remainder payable as an annuity. Under previous rules, the total balance of a provident fund could be paid as a lump sum.

*Exclusions and lifetime limits apply, such as for employees age 55 years or older on 1 March 2021.


The payment of retirement savings in South Africa is changing. Discover more about key employee benefits in this country and across the world with our employee benefits reports.