Retirement Benefits

Normal retirement age is 65 years and you may retire early from the age of 55, with your employer’s consent.

Contributions (that are allocated towards retirement savings) are invested by the Fund over the term of your membership. The interest earned on the contributions invested is also added. At retirement you may then elect to have a pension paid to you from an external financial services provider (insurer) or conversely may take the full or part of the benefit in cash.

From 1 March 2019 the Fund now also offers a Default Pension (Annuity) product. This product will pay you a guaranteed monthly income for life, which will never decrease. There is also an option to include a spouse’s pension if the pensioner dies first. The most important benefit of this option is that you will receive protection against outliving your retirement money.

Retirement Fund benefits taken in cash are taxed if the benefit is greater than R500 000.

Payment of Fund benefit

If you were a member of the Fund before 1 March 2021 and below the age of 55 years

If you were a member of the Fund before 1 March 2021 you will have two accounts within the Fund, a Vested account or “pot” and a non-Vested account or “pot”.

At retirement you will always be able to take your Vested “pot” as a cash lump sum.

If your non-Vested “pot” value is less than R247 500 at retirement you may take the entire benefit as a cash lump sum.

If your non-Vested “pot” is more than R247 500 you will only be able to take one third of this in cash and will have to use two thirds to buy a pension from the Fund or from any insurer in the industry. You will therefore receive a cash lump sum as well as a monthly pension for life.

If you were a member of the Fund before 1 March 2021 and above the age of 55 years

If you were a member of the Fund before 1 March 2021 and you are 55 years and above and you remain a member of the Fund until you retire – you will always only have one account in the Fund, a Vested “pot”. At retirement you will always be able to take your entire benefit in cash.

Should you transfer to any other retirement fund after 1 March 2021, you will have two “pots” at retirement:

• The vested “pot”, which will be an amount that you can take as a lump sum cash benefit at retirement, consisting of your accumulated retirement savings in the Fund on the effective date of the transfer to the new fund, plus the growth earned on the transferred amount in the new fund until retirement.
• The non‐vested “pot”, which will be an amount that you must use to buy an annuity at retirement, consisting of your contributions made to the new fund plus the growth on these contributions, at retirement.

Retirement benefits taken in cash will be taxed according to the table below:

Lump sum Retirement           Tax liability

R0 to R500 000                        Tax free

R500 001 to R700 000             18%

R700 001 to R1 050 000           R36 000 + 27% of taxable income above R700 000

R1 050 001 and above             R 130 500 + 36% of taxable income above R 1 050 000

Please note that the R500 000 tax free, and the table, are applied to a person’s cumulative lump sum retirement benefits from all funds i.e. will include both pension and provident sections and retirement annuities, over your lifetime. These tax rates and limits can change so make sure you get up to date information on the effect tax will have on your benefits before you make any decisions.

RETIREMENT COUNSELLING

The Fund provides Retirement Benefit Counselling to help you understand your options at retirement.