How do the latest retirement reforms affect me?


It is? By who? Don't you think there would be a massive outcry if this was going to happen, much worse than the furore about e-tolls?

However, there is some retirement reform that will come into effect on 1 March 2015, that will impact you as a provident fund member. Currently, you can take your entire provident fund as a cash lump sum at retirement. From 1 March 2015, you must use at least two thirds of your provident fund to buy an annuity (which pays you a regular monthly income). You can still take one-third as a cash lump sum.

HOWEVER, your vested rights are protected. This means that your provident fund balance at 1 March 2015 and subsequent investment returns on THIS balance are exempt from this rule and can still be taken as a cash lump sum at retirement. In other words, the new rule only applies to contributions (and the return on those contributions) made after 1 March 2015.

So the government is not taking away your provident fund savings, it is merely introducing new rules to ensure that people don't outlive their retirement savings. The new rule affecting provident funds is the same rule that has already been imposed for many years on pension fund members.

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