After being a civil servant for 18 years, I recently retired.
My pension was paid out to Glacier/Sanlam. I specifically chose the option because, as I understood it, the state’s part of my pension will also be paid out. This was not the case and I’m still trying to get answers. According to the Government Employees Pension Fund (GEPF), I will not get the state’s contribution because I resigned. They did pay out a pro rata amount because I worked for more than 15 years.
How could I have lost the state’s contribution if I moved my money to a pension preservation fund with Sanlam?
In addition, as I understand it, I’m allowed to withdraw one amount from my money. I need about R300 000 to start a new business. But Sanlam insists that I can only get a third of my savings in cash. This isn’t enough. I would then prefer to take the whole amount now and reinvest the rest.
Michelle Moller, head of client service of Sanlam’s Glacier, responds:
Glacier’s Personal Portfolios Preservation Fund is a registered and approved preservation fund. Membership of this fund is subject to the rules of the fund.
The amount that can be transferred is subject to any restrictions that are specified by the pension fund (in this case, the GEPF).
A member is entitled to one withdrawal from the fund before retirement. The regulations of preservation funds do allow that the whole amount can be withdrawn before retirement. But any withdrawal is subject to the special limits either specified in the rules of the original pension fund or by the commissioner of the SA Revenue Service (Sars).
To comply with Sars regulations and within the limits of the GEPF, the following rules are applicable on withdrawal requests from Glacier (before and after retirement):
- A member will only be allowed to withdraw a third of the transfer amount (including interest) when the amount is moved from the GEPF to Glacier. No further amounts will be allowed before or after retirement. On retirement, the total amount will be used to buy a compulsory income product, like a living annuity.
- If a member withdraws less than a third on the transfer, only the rest of of that third will be available on retirement.
- If no withdrawals are made before retirement, the member will be entitled to withdraw a third of the investment value at retirement.
The actuarial value of the amount which is transferred from the GEPF is calculated by that fund.