Teachers and police resign in mistaken belief about pensions
TEACHERS, police officers and other members of the Government Employee Pension Fund (GEPF) are continuing to resign due to the mistaken assumption that pension rules will change next month.
Acting CEO of the Government Pensions Administration Agency Jay Morar said on Tuesday that rumours continued to circulate that from next month, members of the GEPF would no longer be entitled to a lump sum upon retirement. Teachers and members of the South African Police Service (SAPS) are the most affected.
Mr Morar said the belief was based on the erroneous assumption that public servants would lose access to provident fund savings once proposed new laws (which do not affect the GEPF) came into effect on March 1.
However, the Treasury has delayed implementation of these retirement tax reforms, which aim to harmonise the regime for pension and provident funds by requiring that two-thirds of provident-fund savings be converted into an annuity on retirement, as is the case with pension fund members.
These laws would only affect provident funds regulated through the Pensions Fund Act, while the GEPF is governed by the Government Employees Pension Law and thus is unaffected.
The Congress of South African Trade Unions (Cosatu) has pushed back against the amendments, demanding instead a more comprehensive retirement policy in SA.
The laws have been returned to the National Economic Development and Labour Council (Nedlac) for consideration, and could ultimately be implemented either next year or in 2017.
Cosatu retirement fund policy co-ordinator Jan Mahlangu said on Tuesday that the Nedlac process was yet to get under way as it was waiting for the state to formulate its inter-departmental task team. Mr Mahlangu said it was a matter of concern that individuals continued to resign after Cosatu’s campaign over the issue among its members.
National Professional Teachers’ Organisation of SA president Basil Manuel said on Tuesday that despite various and consistent efforts to clarify the matter, the rumours continued “unabated”.
“It tells us that we need to do quite a lot of work. As a union we need to do much more about educating our membership about financial management,” Mr Manuel said. This was a delicate undertaking, he added.
Meanwhile, the GEPF was facing unclaimed benefits worth hundreds of millions of rand, said Mr Morar.
As of December, these came to R456m, the total from about 17,000 individual cases. The pension fund covers about 1.2-million current members and 360,000 pensioners. – BDLive