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HOW MUCH CAN I WITHDRAW?
Mkululi writes:
Can I still withdraw one-third of my provident fund when this is implemented? If I have R250 000, how much will I withdraw?
City Press replies:
The one-third withdrawal is a misconception. No one will be able to withdraw one-third of the value of their retirement fund (provident, pension or retirement annuity) on implementation date.
In your case 10% equates to R25 000.
That amount will be transferred to your savings pot, and you can withdraw that amount immediately.
CAN I DRAW MORE FOR EMERGENCIES?
Pule writes:
I understand that as I have R60 000 in my pension, only 10% (R6 000) will be transferred into the savings pot for me to withdraw. If I need more money, would I have to prove that I had an emergency requiring me to access more of my retirement money?
City Press replies:
You are correct that 10% (R6 000) will be transferred to your savings pot on the implementation date. The balance of your R60 000 (R54 000 after the 10% withdrawal) will remain in a vested pot which remains accessible should you resign from your employer.
Any future withdrawals will be based on the balance available in your savings pot. You can access these funds once in a calendar year if the balance is above R2 000. You do not have to prove you have an emergency, but you are limited to what has accumulated in the savings pot.
READ: Personal Finance | Two-pot retirement system implementation date changes, again
From the implementation date, one-third of future contributions will go to your savings pot and two-thirds will go to your retirement pot.
If, for example, your total current contribution is R900 per month, then R300 will go into your savings pot each month and R600 to your retirement pot.
The other two-thirds that is paid into your retirement pot is not available for withdraw until retirement.
WILL GEPF MEMBERS GET MORE THAN R30 000?
Abueng asks:
I am a member of the GEPF and have 34 years’ service. I realise that R30 000 maximum withdrawal from my savings pot will be very little and not enough for me to finish my building project of R300 000.
READ: Personal Finance | Two-Pot Retirement System explained for first-time contributors
I heard from a Treasury spokesperson that defined benefit funds work differently from the defined contribution funds used in the private sector. Therefore, the way the savings pot is calculated will be different. Does this mean we could get more funds based on years of service?
City Press:
The maximum withdrawal of R30 000 will still apply to defined benefit funds, and the 10% valuation is likely to be based on the resignation benefit – up to a maximum of R30 000.
What National Treasury was explaining was how the adjustments to years of service will be made to account for these withdrawals.
It would not be fair to give more access to retirement funds for one portion of the population, therefore withdrawals will all be standardised.
