You should clearly understand what your retirement fund’s rules state about how your benefit will be paid out on retirement, because this will have significant implications for the type of pension you can buy on retirement.
Mr Pepler, of Durbanville in the Western Cape, laid a complaint with the office of the Pension Funds Adjudicator in April 2009 regarding the Eskom Pension and Provident Fund.
Pepler resigned from Eskom in March 2005 and chose to leave his withdrawal benefit in the Eskom Pension and Provident Fund until he reached retirement age.
In April 2009, when Pepler retired, the fund paid him one-third of his retirement benefit and used the remaining two-thirds to pay his monthly pension.
Pepler wanted to withdraw the remaining two-thirds of his benefit so that he could invest it with another financial services company, but the fund declined on the grounds that this was not allowed in terms of the fund’s rules.
Pepler asked Elmarie de la Rey, the Acting Pension Funds Adjudicator, to order the fund to allow him to withdraw the remaining two-thirds of his benefit so he could invest it as he wished.
In terms of the fund’s rules, a member must be paid a pension from the fund on retirement. The rules make no provision for a member to transfer his or her retirement benefit to another insurer or to purchase an annuity from another institution.
De la Rey dismissed Pepler’s complaint, saying the fund’s rules do not provide for the outsourcing of pensions.
CONTACT
The Acting Pension Funds Adjudicator is Dr Elmarie de la Rey.
Telephone: 087 942 2700
Website: http://www.pfa.org.za