A group of 67 employees of newspaper group Avusa have been unsuccessful in an attempt to get their provident fund to settle their home loans, for which the fund provides security.
This is one of a number of recent determinations by Acting Pension Funds Adjudicator Dr Elmarie de la Rey.
The Avusa fund members took their complaint to the adjudicator when the fund rejected their application for their home loans from an Alexander Forbes product, HomePlan, to be paid off by the fund.
The members argued that they were struggling to maintain their standards of living while having to repay the loans. By settling the loans from their retirement savings they would have more disposable income.
The adjudicator determined that the fund was correct in its decision because it was only in cases where a member left the fund or had defaulted on a loan without any alternative of maintaining repayments that retirement savings could be used to repay home loans.
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Depending on the rules of your fund, the trustees of a fund may not take it upon themselves to decide whether your money should be held until retirement if you resign from the fund before retirement.
The adjudicator has determined that complainant SKT was entitled to his benefits after he initially became a non-contributory member of the Mine Employees Pension Fund.
The fund had rejected his application for his benefits after resigning from his job because he failed to decide whether to take the money for six months after he resigned.
The fund argued that the six-month restriction was in place because the South African Revenue Service is concerned that members who take withdrawal benefits some years after leaving service do so when their tax rates have reduced.
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Be careful that what you put into a divorce agreement is sustainable in law – or it may cost you a lot of money.
EWD and his wife spouse KLD were divorced in June 2002. In terms of their divorce settlement KLD was entitled to half of EWD’s retirement savings in the University of Cape Town Retirement Fund plus interest of 15.5 percent a year, which would have been paid out in terms of then legislation when EWD left the fund or retired.
When the legislation was changed in 2007 allowing former non-member spouses access to retirement savings in terms of divorce agreements, KLD applied for her share to be transferred to another fund.
However, in terms of legislation only the capital amount and not any interest could be transferred. EWD complained to the adjudicator that the refusal of the fund to pay the interest meant he would be personally liable for the interest, which he could not afford to pay.
De la Rey agreed that the former spouse had a claim against EWD, but the fund could not be asked to pay the interest.