You should never underestimate the effect that early withdrawals from your retirement savings will have on your final payout.
Elmarie de la Rey, the Acting Pension Funds Adjudicator, this week dismissed a complaint by Qondile Dyosi, of Port Elizabeth, about the size of his payout from the Southern & Eastern Cape Building Industry Provident Fund.
Dyosi was employed on and off by construction company Murray & Roberts from 1982 to February 28, 2009, when he was retrenched. The fund paid him a final withdrawal benefit of R5 427.94.
Alexander Forbes Financial Services, the fund’s administrator, told De la Rey that Murray & Roberts became a participating employer in the fund in March 1995, and so Dyosi only became a fund member at that time and not in 1982.
Alexander Forbes told De la Rey that its records showed that Dyosi made two early withdrawals from the fund – R4 230.06 in October 1999 and R887.69 in August 2000 – before his final withdrawal of R5 427.94 in March 2009.
Murray & Roberts had employed Dyosi on different construction projects. It had retrenched him on the completion of each project and re-hired him for new projects.
Dismissing Dyosi’s complaint, De la Rey said: “According to the rules of the Southern & Eastern Cape Building Industry Provident Fund, a member’s withdrawal benefit is calculated on the basis of his total contributions, the employer’s contributions plus fund returns. It is not affected by the years of service with the employer, and we are satisfied that Dyosi’s withdrawal benefit was calculated correctly.”
Dyosi also complained to the adjudicator that his severance package had been too small. De la Rey said her office did not have jurisdiction over that matter, and she referred Dyosi to the Commission for Conciliation, Mediation and Arbitration.