Retirement Annuity Fund
Explanation of specific events on your Retirement Annuity Fund:
Retirement Age:
In terms of the Income Tax Act, you are entitled to a retirement benefit at any time after the age of 55.
Retirement Benefit:
The member of the Retirement Annuity Fund may elect to:
- Receive a maximum of one-third of the investment value as a cash lump sum, subject to tax and use the balance to purchase a compulsory annuity, or
- If the total retirement benefit is equal to or less than R247 500 then 100% of the retirement benefit may be taken as a cash lump sum subject to tax, or
- Purchase a compulsory annuity with the full retirement benefit.
- The tax-free portion of the cash lump sum, on retirement, is limited to R500 000 per member. Previous withdrawals and/or retirement from other registered retirement funds will have an impact on the tax-free portion. The balance of the cash lump sum will be taxed as per a predefined tax table prescribed by SARS.
Ill-health (disability) Retirement Benefit:
In the event of a member becoming permanently incapable of carrying on his/her occupation due to sickness, accident, or incapacity through infirmity of mind or body prior to reaching the age of 55, the member may apply to the Trustees of the Fund to be allowed to retire early on the basis of Ill health (disability).
The member may, subject to income tax, elect to:
- Receive a maximum of one-third of the investment value as a cash lump sum, subject to tax and use the balance to purchase a compulsory annuity, or
- If the total retirement benefit is equal to or less than R 247 500 then 100% of the retirement benefit may be taken as a cash lump sum subject to tax, or
- Purchase a compulsory annuity with the full retirement benefit.
Withdrawal benefit:
In terms of legislation withdrawals from the Retirement Annuity are only allowed under the following circumstances:
- In case of emigration, you may withdraw your full investment value, subject to confirmation from the South African Reserve Bank that the emigration has been formally recognised.
- Where the total value of your retirement annuity is less than R 7 000.
Death benefit:
In the event of the death of the member prior to the retirement date, the benefit will be paid to the member’s dependents or nominated beneficiaries in such proportions as the Trustees deem equitable, or failing such persons, the member’s estate.
An appointment of nominated beneficiaries by the member before his death will be taken into account, but the Trustees must look to the needs of the dependents that may not have been appointed and who may have a valid claim as required by Section 37C of the Pension Funds Act, 1956. It is therefore important that the member nominates beneficiaries to ensure that the Trustees are aware of their existence to enable them to make informed decisions.
Should you wish to amend the existing appointed beneficiaries, or should you wish to appoint new beneficiaries, please complete the Beneficiary Nomination Form and return same to us.
On the death of a member the members benefit will be switched from the current investment choice into a default money market fund until the death benefit is paid to the member’s dependents or beneficiaries.