What benefits you will receive on retirement

Retirement benefits

The Political Office-Bearers Pension Fund is a Pension Fund, which means that if you take a retirement benefit (your Fund Credit) from the Fund when you leave office, you can take only a part of your Fund Credit as a cash lump sum. The balance of your retirement benefit must be used to buy a pension from an insurance company.

As from September 2024, your Fund Credit will be split between three components or "pots" - this is explained on the page called "The design of the Fund" (so we will not explain it again here).

• You will be able to take up to one-third of the value in your Vested Pot as a cash lump sum (minus tax)
• You will be able to take up to the full value in your Savings Pot as a cash lump sum (minus tax)
• However, you will not be able to take the value in your Retirement Pot in cash (unless the balance together with two-thirds of the Vested Pot balance is less than R 165 000 - but this will apply to very few Fund members)
• Whatever you don't take in cash (including your full Retirement Pot and at least two-thirds of your Vested Pot) must be used to provide you with a pension

(Special provisions may apply to benefits arising from any amount you transferred in to the Fund from a provident fund of which you were a member previously - this is not dealt with in this benefit guide.)

At what age can I retire?

In terms of the Fund Rules you are permitted to retire at any time from age 50 onwards (or earlier if you are forced to leave office on the grounds of ill-health).

Put differently, this means that, if you are 50 or over when your term of office ends, you can choose to take your Fund benefits in the form of a retirement benefit (pension).

What is my retirement benefit, and how can I receive this benefit?

On retirement, the benefit is your FUND CREDIT as explained above. (There may also be additional gratuity amounts paid by your legislature, as discussed later – we will not deal with these here.)

The Political Office Bearers Fund is a Pension Fund, and because of this you can receive up to a specified maximum of your retirement benefit as a cash lump sum, before tax, as explained above. The rest of your retirement benefit must then be used to buy a pension from a registered Insurance Company. The tax treatment of the lump sum and the pension is described in the pages titled "Taxation of Benefits".

Once you have received your retirement benefit, your membership of the Fund ends. This means that you and your dependents have no further claim for benefits against the Fund, including insured death and disability benefits (which fall away on the day that you leave office).

At retirement you therefore face two important choices, namely:

• How much of your benefit should you take in cash?; and
• What type of pension should you receive in retirement?

These issues are dealt with in the pages titled “Retirement Options”.

What is my retirement benefit on ill-health early retirement, if I do not qualify for an insured Disability Benefit?

If, after considering such medical evidence as they may reasonably require, the Trustees are satisfied that you have become permanently and totally incapable of continuing with your duties as a political office-bearer, but you are not covered by the Disability Benefit insurance, you may retire early at any time before the normal minimum retirement age of 50. The full amount of your Fund Credit will become available to you to buy a pension, as described above (you also have the option to take up to the specified maximum amount in cash, before tax, as explained above). The tax treatment of the lump sum and the pension is described in the pages titled "Taxation of Benefits".