Question:
Hi there, I would like to get some clarity, as am I very confused with regards to the preservation funds, on how it works! I am resigning and my last day is 10/09/2014, my pension is now being processed and I'm being phoned from the department, on what I want to do with my pension. If I decided to transfer to a preservation fund from my pension fund , I know that I'm allowed one withdrawal before the age of 55. What is the maximum amount or percentage that I can withdraw if I decided to make the withdrawal? or what is the amount that needs to stay in the preservation fund, untill the age of 55 or retirement.
Answer:
Candice, Assuming you do not work for the State (different rules apply to Government Employees Pension Fund members), you are allowed to withdraw the full amount, or any part/percentage that you wish. There is no minimum amount that needs to stay in the fund. You may also withdraw a part of your pension fund before you transfer to the preservation fund, and you will then still be allowed to make one further (full or partial) withdrawal from the preservation fund before retirement (earliest age 55). If you are a GEPF member, you are also allowed one withdrawal from the preservation fund but none before transfer. This withdrawal can be no more than one-third of the fund value. You must then use the entire remaining balance in the fund to buy an annuity at retirement.
