Question:
Hi... I have a question, I just want to know how this really works legally. When you work for contractors and they hand the company and employees over to the company they have the contract with, example: I work for company A, who are contractors of company B, but company B decides they don't need company A anymore and want to do the work themselves, so company A signs their employees over to company B. Can we have our provident funds pay out, or do they have the legal rights to just transfer it?
Answer:
Mariska,
If you were previously employed by company A and now you are employed by company B, then you have changed your employer. This would entitle you to withdraw from the retirement fund you had with company A.
But if you were previously employed by company A, and company B buys company A, then your employer has not changed, even if you now effectively work for company B. In that case, you cannot withdraw from company's A retirement fund. It then becomes a management (Board of Trustee) decision whether company A's retirement fund should transfer into company B's retirement fund.
