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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

        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.

        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.