A pension fund is if an employee who has a pension fund retires the member gets one third of the total benefit in a cash lump sum. And the other two-thirds is paid out in the form of a pension over the rest of the member’s life.
As a society, retirement savings in a country need to be addressed. At the same time ensuring that those who are saving diligently are able to benefit from their savings during their retirement.
This is where a Pension Fund Act would come in. Because just as with any Act out there, the Pension Fund Act is there to provide laws in order to protect a pensioner or the entity providing the pension fund.
Within the Pension Fund Act there are certain laws that are introduced into parliament by the government and these need to be adhered to by the necessary participants.
Whether you rely on private or occupational-based pensions these may include employers who provide pension funds to their employees through corporate pension funds. Or those employed in South Africa’s public sector who are entitled to membership of the Government Employee Pension Funds (GEPF), which is Africa’s largest pension fund.
The South African pension system is based on a three-pillar system:
- A non-contributory means-tested South African Social Security Agency (SASSA) grant provided to the majority of pensioners.
- Various insurance-based employee and company pensions and provident funds.
- Private pensions and insurance arrangements.