The money you have saved in the Fund is there to help provide an income when you retire.
Your normal retirement age is 65 years.
You have some options of what to do with your retirement benefit when you retire from the University:
1. Defer receiving your retirement benefit by:
- Keeping your retirement benefit in the Fund (you become a deferred retiree); or
- Transferring your benefit to a retirement annuity fund or preservation fund.
2. You can start receiving a pension income now by purchasing an annuity:
- Purchase one of the annuities from the Fund’s annuity strategy; or
- Purchase an annuity form any annuity provider that you choose.
3. If you want to start receiving a pension income now, you can also take cash:
- The options available to you at retirement as to how much cash you can take versus how much pension income you must buy depends how much of your benefit is “vested” and how much is “non-vested”. You can tell how much of your retirement benefit is vested or non-vested by looking at your benefit statement.
- You may take a maximum of vested part of your benefit plus one-third of the non-vested part of your benefit in cash. The rest must be used to buy a pension.
- How much of your benefit is vested depends on, among other things, your age on 1 March 2021 and when you joined the Fund. Please contact the Fund consultant if you are unsure.
If you elect to withdraw your benefit in cash, the benefit will be taxed according to the following tax table:
|R0 – R500 000||0%|
|R500 001 – R700 000||18% of the amount over R500 000|
|R700 001 – R1 050 000||R36 000 + 27% of the amount above R700 000|
|R1 050 001 and above||R130 500 + 36% of the amount above R1 050 000|
The Fund rules allow you to retire from age 55. If you retire early, the options are the same as when you retire at your normal retirement age. However, you would have saved less if you retire earlier than you would if you retire later.
It is generally not University practice to continue to employ staff beyond the age of 65. Should this be permitted by University Policy in special circumstances, the contribution to the Fund must continue to be paid via the University’s payroll system.
When you then retire, your benefit value will be equal to your full Fund credit at your late retirement date.
In the event of death whilst still a Fund member after age 65, a benefit is paid equal in value to your Fund credit at date of death.
It is important to note that all insured benefits cease from the 1st of the month following the month in which you turn 65.
You can defer your retirement from the Fund if you are 55 years or older:
You can defer your retirement from the Fund, by retiring from your employer, but leaving your retirement benefit invested in the Fund until you choose to take your retirement savings from the Fund.
If you choose this option, you will not be able to make further contributions and you will remain invested in the investment portfolio you were invested in before retirement (until you select another portfolio). You will not be entitled to insurance benefits from the Fund.
The investment return on your retirement savings will depend on the investment return on the portfolio(s) you are invested in.
Purchasing one of the Annuities in the Fund’s Annuity Strategy
The Fund’s annuity strategy has been put in place to help members who are not sure what to do with their retirement benefit at retirement and do not have access to financial advice on an appropriate retirement solution. When you reach retirement, you have the option to purchase a pension (that gives you a monthly pension income) as selected by the Board. You would still need to make the choice to select this option. Of course, you do not need to choose an annuity from the Fund’s annuity strategy at all, you can choose any annuity.