As thousands of teachers, among other public servants, have resigned to cash in their pensions in the belief they will otherwise lose benefits, the Government Pensions Administration Agency (GPAA) is trying to halt the flight by setting the record straight.
Acting GPAA chief operations officer, Jay Morar, comments: “There is a rumour circulating that come 1 March 2015, GEPF (Government Employees Pension Fund) members will no longer be entitled to a lump sum.
“Sadly, this state of affairs is still continuing unabated. I would like to categorically dismiss this assertion or rumour as a total lie.”
Morar says there has been a significant increase in the number of government employees, especially teachers, who resigned in the last financial year.
This is not the first time authorities have moved to put to bed pension fund rumours. Last year, Finance Minister Nhlanhla Nene urged South Africans to stop cashing in their provident fund savings when they resign or change jobs as rumours about plans to nationalise employee pension funds were false.
The GPAA received the most resignations from teachers, followed by South African Police Service officials.
However, Morar urged GEPF members not to resign, saying it deprives them of the well-deserved benefits earned over many years of public service.
“The GPAA has received an average of 2 239 resignation cases per month, on average receiving a total of 26 824 resignation cases per financial year,” says Morar.
The highest number of resignation cases, approximately 4 600, from GEPF members was recorded in November 2014, which is slightly double the monthly average that GPAA received per month.
Morar appeals to GEPF members to not opt for resigning, but to retire with GEPF to enjoy long-term benefits.
He says most resignation cases showed that members were very close to retirement, and that it would have been better if they waited for retirement.
“An average of 2 079 retirement cases are received by the GPAA each month, and a total of 24 948 retirement cases are received each financial year,” he says.
Morar stresses that all members of the GEPF will still be entitled to a lump sum when they retire, no matter when.
He says the proposed pension reforms are aimed at harmonising pension fund and provident funds in South Africa. However, National Treasury has decided to suspend the introduction of these pension reforms pending further discussions at the National Economic Development and Labour Council (Nedlac).
“It is hoped that they might be reintroduced by 1 March 2016, provided an agreement is reached. Alternatively, the pension reforms will be introduced on 1 March 2017.”
He adds that GEPF pensioners are entitled to a lump sum when they retire, subject to the fund’s rules. They will also receive a monthly pension that is guaranteed for their entire life, also subject to the fund’s rules, with annual increases. They are also entitled to medical subsidy, subject to the pensioner having 15 years of service, being 50 years of age and older and being the principal member of medical aid for 12 months prior to their retirement.
