Membership of the Electrical Industry Kwazulu Natal Pension Fund provides the following benefits –
Death benefits
The Fund currently provides a death benefit of two times your pensionable salary plus your accumulated fund credit.
Please ensure that your nomination of beneficiary form is updated on a regular basis and given to HR to keep on your employee file. Should you pass away, your wishes could be considered in terms of the information provided on your nomination of beneficiary form.
Disability benefits
Should you become temporarily or permanently disabled to do your or a similar job, you will receive a monthly income of 50% of your current monthly earnings. There will be no tax payable on this benefit. You will continue to contribute to the fund until the normal retirement age, which is 65.
Retirement benefits
You will be entitled to take one-third of your accumulated fund credit in cash (subject to tax), and the balance of two-thirds will be utilized to provide you with a monthly pension. The one-third will be taxed as per the Income Tax Act. The first R500 000 will be tax-free. If your total retirement benefit is less than R247 500, you will be allowed to take 100% of the benefit in cash, subject to tax.
Accumulated fund credit
You are entitled to your accumulated fund credit which consists of your and the employer contributions, minus the deductions (as described in the contributions page), plus investment growth.
You have the following options on withdrawal:
- Leave your benefit in the Fund as a paid-up member until normal retirement age, or until you want to withdraw from the Fund.
- Move your benefit to your new Employer’s Fund (no tax).
- Transfer your benefit to a Pension Preservation Fund (no tax).
- Take your benefit in cash – tax will be deducted in terms of the Income Tax Act. The first R25 000 will be tax-free.
Two-Pot System
From 01 September 2024 any amount saved in a retirement fund was split into two pots:
• Retirement Pot – Amount must be used to purchase a pension at retirement.
• Savings Pot – Amount can be accessed prior to retirement.
A third pot (Vested Pot) was created which included the accumulated savings up to 31 August 2024. Members may still access this if they resign or retire. However 10% of this amount up to R30 000 was transferred to the Savings Pot at the start of the two-pot system (01 September 2024).
Members are allowed to make withdrawals from the Savings Pot subject to the following:
- R2 000 minimum withdrawal amount from the Savings Pot once every tax year. Any withdrawal is subject to tax at the personal income tax rate.
- Fund membership terminated (i.e. full termination, no paid-up benefit left in the fund) – The minimum withdrawal amount of R2 000 from the Savings Pot once every tax year does not apply.
Although withdrawals are permissible from the Saving Pot, members are reminded that pre-retirement withdrawals reduce their retirement savings at retirement. The loss of capital and investment return may be significant.
Please also think carefully about taking any portion of your benefits in cash, as tax may apply on the cash portion and your monthly pension income may well be far less than you require.
We advise members to consult reputable and accredited financial advisors prior to making any withdrawal.
Funeral benefits
Your funeral benefits are as follows:
| Main member | R20 000 |
| Spouse | R15 000 |
| Child 14 – 21 | R10 000 |
| Child 6 – 13 | 7 500 |
| Child 1 – 5 | 3 500 |
| Stillborn – 11 months | 3 500 |