The Government Employees Pension Fund (GEPF) has assured its members and pensioners that the new Taxation Laws Amendment Act will not affect their pensions or benefits.
The fund is SA’s largest pension fund and investor, with about 1.2-million members and more than R1-trillion in assets under management.
It pointed out on Monday that as a defined benefit pension fund‚ the benefits of the fund were already taken as a one-third lump sum gratuity and the remaining two-thirds were taken as a pension.
The fund said the changes would, however, affect the recording and attribution of the employer’s contribution in respect of active members. It would also increase the amount that could be contributed to the fund tax-free for the majority of its members.
The new tax laws were put in place to safeguard the retirement savings of all South Africans who contribute to retirement funds.
These changes will mostly affect members of provident funds, who will now have to split their retirement benefit between a one-third lump sum and two-thirds pension on the portion of their benefits accumulated after March 1 this year, while retaining the right to take all amounts accumulated until this date as a lump sum.
GEPF principal executive officer Abel Sithole stressed that the fund continued to work for the financial security of its members and pensioners.
“Members of the GEPF will be able to access their pensions after March 1 2016 in exactly the same way as they can be accessed currently.
“None of the calculations and benefits will change due to these changes‚” Mr Sithole said.
He urged members not to panic and consider leaving the fund to access their full pension benefits.
He said the new act would not take away the right of pension-fund members to withdraw their benefits before or at retirement as a lump sum.