Question:
Can I make a withdrawal from my provident fund? I want to put down a deposit on a house. I've been working for a private company for 12 years and I just want some of my provident fund money.
Answer:
Nhlanhla,
You can only "withdraw" your provident fund savings when you resign from the fund, which may happen when you leave your employer i.e. if your resign, or you are fired or retrenched. If you plan to stay with your current employer, you cannot access your retirement fund until you retire. The earliest you are allowed to "retire" from your provident fund is at age 55. These restrictions are imposed to ensure that this money is used for its intended purpose (primarily to provide for you in your retirement)
Having said this, s19(5) Pension Funds Act does permit housing loans (secured either by a mortgage or a pledge of your retirement savings). The Pension Funds Act sets restrictions and conditions on the amount and use of such loans. Such loans may only be used to purchase immovable property, and only if you and/or your dependents will stay in that property, or, if buying land, you will erect a property on that site, with the intention of living there. Whether your provident fund permits such a housing loan depends on the particular rules of your fund.
