What Is The Best Provident Fund In South Africa

What is Provident Fund?

Provident Fund is a government-managed retirement Savings Scheme for employees who can contribute a part of their pension fund every month.

What Is The Best Provident Fund In South Africa

Below are some of the Best Provident Funds.

Flagship high equity index fundNedgroup Investments Core Diversified Fund10x High Equity Index Fund
Total Investment cost of above fund (incl VAT)0.40% p.a.Up to 0.115% p.a.

What’s the difference between a pension and a provident fund?

A pension fund is a retirement fund that receives frequent contributions (usually monthly) from you and your employer. At retirement, you can access up to one third of the benefit in cash, and the remaining two thirds must be used to purchase an income annuity.

A provident fund is the same as a pension fund, but prior to 1 March 2021, it differed in that when you resigned or retired, you could take the entire sum as cash, which you’d be taxed on. You wouldn’t need to purchase an annuity. With the retirement reforms introduced from 1 March 2021, provident funds are now more similar to pension funds, and the following now applies:

  • Fund members are required to take a third of the benefit as a lump sum.
  • They must use the remaining two thirds to buy a pension that provides a monthly income.

What is the best provident fund in South Africa?

The Government Employee Pension Fund (GEPF) owns R2. 3 trillion worth of assets, including 22% of MTN, 9% of Naspers, 15% of Standard Bank, and 18% of Sasol. The GEPF manages pensions and related benefits on behalf of government employees. It is Africa’s largest pension fund, with 450,000 pensioners and beneficiaries.

How long does it take to receive provident fund in South Africa?

Answer: Hi Fazila, Provided your tax affairs are in order, and you have submitted all the required documents (such as a copy of your ID, a completed instruction form stating where the money should go, and proof of banking details), it normally takes 14 to 21 business days to receive your provident fund pay-out.