Question:
I have an Old Mutual which RA is paid-up. I liquidated my business and owe Nedbank some money. Are Nedbank not be able to collect some of my retirement annuity funds on my behalf? Regards, Clinton
Answer:
Clinton,
This is not possible. The purpose of your retirement annuity is to provide for your retirement, and to this end your savings are shielded from creditors. You cannot access this money before retirement (earliest age 55), other than under exceptional circumstances (formal immigration, disability).
S37a of the Pension Funds Act (covering also RA’s) stipulates that a member’s benefits payable in terms of the rules of a fund cannot be reduced, transferred, ceded, pledged or hypothecated, subjected to any form of execution under a judgement or order of court of law, or taken into account in the determination of a judgement debtor’s financial position for an amount exceeding R3 000. (In other words, only R3 000 may be deducted from your RA in order to pay creditors if there is a debt judgment against you.)
In terms of S37B, pension assets do not form part of an insolvent estate. In that event, the full amount of your fund is protected from creditors in the event you go insolvent.
