Pension Law

• • Generally, retirement fund plans are subject to the regulation and supervision of the Pension Funds Act 24 of 1956. Those that are not
    subject to the Act are state-guaranteed funds established under other specific statutes including the Government Employees Pension Fund
    and three funds established in terms of the Transnet Pension Funds Act.
    
    The main aim of a pension or provident fund is to provide benefits for its members when they retire from employment. The fund also generally
    pays benefits when a member dies while still working, or is unable to work because of illness, or is retrenched.
    
    Difference between a pension fund and a provident fund:
    
    The main difference is that if a pension fund member retires the member receives one third of the total benefit in a cash lump and the other two
    thirds is paid out in the form of a pension over the rest of the member’s life. Whereas, a provident fund member can get the full benefit paid in a cash lump sum.
    
    Advantages and disadvantages of a pension fund and a provident fund:
    
    One disadvantage of a provident fund is that you may spend the lump sum very quickly. An advantage would be that a provident fund member
    can also qualify for state pension in certain cases.
    
    An advantage of a pension fund is that better tax benefits are offered to the worker. A worker’s contributions to a pension fund are deductible for
    tax. A disadvantage of a pension fund is that if a person receives private pension, that person is disqualified from receiving a state old-age
    pension.
    
    The primary regulatory authorities are:
    
    • the South African Revenue Service, which enforces compliance by employers, funds and their members with tax laws;
    
    • the Financial Sector Conduct Authority;
    
    • the Prudential Authority.
    
    The latter two authorities supervise and enforce compliance with laws relating to the financial soundness of financial institutions and the fair
    treatment of financial sector customers.
    
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    Hi, I’m Kailash Pillay, an attorney from the city of Johannesburg. My passion for the law
    stems from a desire to improve upon the lives of the vulnerable who fall prey to a
    corrupt system.
    I studied at the University of Johannesburg where I obtained my Bachelor of Laws
    degree, the starting point to the long journey of becoming a legal practitioner.
    This profession has taught me to persevere through the complexities of the law and to
    continually develop my skills as a legal professional.