Lump Sum of One Third

The lump sum that you may take in cash at retirement.

As from 1 March 2015, members of provident funds will only be allowed to take one third of their benefit at retirement as a cash lump sum payment. The balance of the benefit must be used to buy a pension to provide an income to the member after retirement.

Exceptions:

• If your total accumulated benefit at retirement is less than R150 000, you may take the full benefit as a cash lump sum.
• You will still be able to take the provident fund contributions that accumulated up to 1 March 2015 plus past and future investment growth on these values in cash when you retire. This ‘protected’ amount will not be taken into account for purposes of the R150 000 threshold referred to above.

The amended law is only applicable to the provident fund contributions (of members younger than 55 years on 1 March 2015) that accumulate as from 1 March 2015.

Special arrangements for members 55 years and older on 1 March 2015:

• Members 55 years and older on 1 March 2015 (if they remain in the same provident fund) will still be allowed to take their full retirement benefit (including contributions and growth after 1 March 2015) as a cash lump sum at retirement.

How will this change impact on members of the Sanlam Staff Umbrella Pension and Provident Funds (SSUF)?

The fund administrator will keep record of each member’s contributions before 1 March 2015 (and growth thereon) and also the contributions as from 1 March 2015.