Question:
Hi, My employer is in a process of amalgamating with one of the biggest life insurance companies. I will like to know if one can withdraw from their provident fund during this process and how will section 14 of the Pension Funds Act affects the chances of withdrawing? Thank you, Lebo
Answer:
Lebo,
Normally, you may only withdraw from your provident fund if you resign, or you are retrenched or dismissed. Mergers and acquisitions are a bit of a grey area in this regard, as it usually depends on the structure of the deal, and the legal agreement between the parties. If the agreement stipulates that employees may not withdraw, then this precludes employees leaving the fund. It would also have to be an "all or none" situation ie employees will not be given the choice to leave or stay. All must stay or all must withdraw. In other words, it will be matter of management policy. The arrangement usually is that employees are NOT allowed to resign from the fund. As you are still be employed, that is also the right to do.
If you do plan to resign during this process, you should not be affected by the s14 transfer until the FSB has signed off on the final transfer (which happens near the end of the process, ie after about six month). After that, there is usually a 2 month period, where fund members will not be paid out. They have to wait until the new administrator has received the money, and they then have to submit their withdrawal form to the new administrator.
