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Pension Law

  • 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.