10-02-2015, 05:08 PM
Acting Government Pensions Administration Agency (GPAA) Chief Operations Officer, Jay Morar, has set the record straight on pension fund rumours that have led to scores of resignations in the public sector.
“There is a rumour circulating that come the 1st of March 2015, GEPF [Government Employees Pension Fund] members will no longer be entitled to a lump sum.
“Sadly, this state of affairs is still continuing unabated. I would like to categorically dismiss this assertion or rumour as a total lie,†said Morar on Tuesday.
In a media briefing in Pretoria, Morar said there has been a significant increase in the number of government employees, especially teachers, who resigned in the last financial year.
Morar said the resignation trend among teachers increased following rumours that GEPF members will not get a lump sum when they retire due to pension reforms.
This is not the first time authorities have moved to put to bed pension fund rumours. Last year, Finance Minister Nhlanhla Nene urged South Africans to stop cashing in their provident fund savings when they resign or change jobs.
He said rumours that retirement savings were under threat, due to plans to nationalise employee pension funds, were false.
Minister Nene said nationalisation rumours were false and that government’s plan to reform retirement savings was designed to ensure that members get to withdraw their retirement savings without fund managers, particularly trustees, subjecting them to exorbitant charges.
Teachers leading in resignations
Morar said the rumours that continue to circulate are misleading.
The GPAA received the most resignations from teachers, followed by South African Police Service officials.
Morar discouraged GEPF members from resigning, saying it deprives them of the well-deserved benefits earned over many years of public service.
“The GPAA has received an average of 2 239 resignation cases per month, on average receiving a total of 26 824 resignation cases per financial year,†said Morar.
The highest number of resignation cases, approximately 4 600, from GEPF members was recorded in November 2014, which is slightly double the monthly average that GPAA received per month.
Morar appealed to GEPF members to not opt for resigning, but to retire with GEPF to enjoy long-term benefits.
He said most resignation cases showed that members were very close to retirement, and that it would have been better if they waited for retirement.
“An average of 2 079 retirement cases are received by the GPAA each month, and a total of 24 948 retirement cases are received each financial year,†he said.
What happens at retirement?
Morar said all members of the GEPF will still be entitled to a lump sum when they retire, no matter when.
He said the proposed pension reforms are aimed at harmonising pension fund and provident funds in South Africa.
However, Morar confirmed that National Treasury has decided to suspend the introduction of these pension reforms pending further discussions at the National Economic Development and Labour Council (Nedlac).
“It is hoped that they might be reintroduced by the 1st of March 2016, provided an agreement is reached. Alternatively, the pension reforms will be introduced on the 1st of March 2017,†he said.
He urged GEPF members who are currently working to stop resigning because they are afraid they will lose their hard-earned money, especially their lump sum benefits.
“I would like to appeal to GEPF members, most importantly teachers who seem to be the largest category affected by this misinformation, to approach the GPAA and seek clarity whenever they are in doubt before taking a life changing decision and resigning with less than two years to go before they reach their retirement age.â€
Benefits
Morar said it is important that members retire with GEPF because pensioners are entitled to a lump sum when they retire, subject to the fund’s rules.
He said all GEPF pensioners receive a monthly pension that is guaranteed for their entire life, also subject to the fund’s rules.
“GEPF pensioners are entitled to annual pension increases that are effective from the first of April every year, as determined by GEPF’s Board of Trustees,†he said.
He also said that members who retire with GEPF are entitled to medical subsidy, subject to the pensioner having 15 years of service, being 50 years of age and older and being the principal member of medical aid for 12 months prior to their retirement.
Morar said another benefit for GEPF pensioners is that when a member retires, the first R500 000 is tax free; whereas when a member opts to resign, only the first R25 000 is tax free. - SAnews.gov.za
“There is a rumour circulating that come the 1st of March 2015, GEPF [Government Employees Pension Fund] members will no longer be entitled to a lump sum.
“Sadly, this state of affairs is still continuing unabated. I would like to categorically dismiss this assertion or rumour as a total lie,†said Morar on Tuesday.
In a media briefing in Pretoria, Morar said there has been a significant increase in the number of government employees, especially teachers, who resigned in the last financial year.
Morar said the resignation trend among teachers increased following rumours that GEPF members will not get a lump sum when they retire due to pension reforms.
This is not the first time authorities have moved to put to bed pension fund rumours. Last year, Finance Minister Nhlanhla Nene urged South Africans to stop cashing in their provident fund savings when they resign or change jobs.
He said rumours that retirement savings were under threat, due to plans to nationalise employee pension funds, were false.
Minister Nene said nationalisation rumours were false and that government’s plan to reform retirement savings was designed to ensure that members get to withdraw their retirement savings without fund managers, particularly trustees, subjecting them to exorbitant charges.
Teachers leading in resignations
Morar said the rumours that continue to circulate are misleading.
The GPAA received the most resignations from teachers, followed by South African Police Service officials.
Morar discouraged GEPF members from resigning, saying it deprives them of the well-deserved benefits earned over many years of public service.
“The GPAA has received an average of 2 239 resignation cases per month, on average receiving a total of 26 824 resignation cases per financial year,†said Morar.
The highest number of resignation cases, approximately 4 600, from GEPF members was recorded in November 2014, which is slightly double the monthly average that GPAA received per month.
Morar appealed to GEPF members to not opt for resigning, but to retire with GEPF to enjoy long-term benefits.
He said most resignation cases showed that members were very close to retirement, and that it would have been better if they waited for retirement.
“An average of 2 079 retirement cases are received by the GPAA each month, and a total of 24 948 retirement cases are received each financial year,†he said.
What happens at retirement?
Morar said all members of the GEPF will still be entitled to a lump sum when they retire, no matter when.
He said the proposed pension reforms are aimed at harmonising pension fund and provident funds in South Africa.
However, Morar confirmed that National Treasury has decided to suspend the introduction of these pension reforms pending further discussions at the National Economic Development and Labour Council (Nedlac).
“It is hoped that they might be reintroduced by the 1st of March 2016, provided an agreement is reached. Alternatively, the pension reforms will be introduced on the 1st of March 2017,†he said.
He urged GEPF members who are currently working to stop resigning because they are afraid they will lose their hard-earned money, especially their lump sum benefits.
“I would like to appeal to GEPF members, most importantly teachers who seem to be the largest category affected by this misinformation, to approach the GPAA and seek clarity whenever they are in doubt before taking a life changing decision and resigning with less than two years to go before they reach their retirement age.â€
Benefits
Morar said it is important that members retire with GEPF because pensioners are entitled to a lump sum when they retire, subject to the fund’s rules.
He said all GEPF pensioners receive a monthly pension that is guaranteed for their entire life, also subject to the fund’s rules.
“GEPF pensioners are entitled to annual pension increases that are effective from the first of April every year, as determined by GEPF’s Board of Trustees,†he said.
He also said that members who retire with GEPF are entitled to medical subsidy, subject to the pensioner having 15 years of service, being 50 years of age and older and being the principal member of medical aid for 12 months prior to their retirement.
Morar said another benefit for GEPF pensioners is that when a member retires, the first R500 000 is tax free; whereas when a member opts to resign, only the first R25 000 is tax free. - SAnews.gov.za