’Normal retirement age is 65 years and you may retire early from age 55 with the consent of your employer.
Contributions that are allocated towards retirement savings are invested by the Fund over the term of your membership.
From 1 March 2021 provident funds work like pension funds, i.e. at retirement only one- third can be taken as a cash lump sum and two-thirds must be used to buy a pension for life. To protect members’ vested rights all members will from 1 March 2021 have two “pots” of money in a Fund. A vested “pot” and a non-vested “pot”.
What is the difference between a vested “pot” and a non-vested “pot”?
The vested “pot” of money is the member’s current fund savings as at 1 March 2021 plus growth on the money until the member retires. At retirement this pot can be taken as a cash lump sum.
The non-vested “pot” of money is all the new contributions from 1 March 2021 up until the member retires plus growth. At retirement the member can only take one-third of this money as a cash lump sum and two-thirds must be used to buy a pension (compulsory/guaranteed/life annuity).
If the non-vested “pot” is less than R247 500 (the de minimis) this may be taken as a cash lump sum.