Pension Reforms : No need for panic
A huge uproar is currently being made of the fact that the President has signed the Tax Administration Laws Amendment Act and Taxation Laws Amendment Act of 2015, pertaining to certain pension reforms, into law.
These reforms take effect on 1 March 2016. Members are yet again reminded that the reforms only affect PROVIDENT FUNDS. The Government Employees Pension Fund (GEPF) is NOT a provident fund, but a pension fund. Members of the GEPF will therefore NOT be affected by these pension reforms. In other words the pension rules that currently apply to educators remain as they are. Gratuities will still be paid to those educators who retire and qualify for such gratuities in terms of the GEPF Rules. The taxation law coming into effect on March 2016 will align and extend the current dispensation to provident funds, and hence will not change the rules of GEPF in anyway.
The GEPF is a defined – benefit fund, where Government, as the employer, guarantees all benefits to all members, irrespective of what happens to the funds invested by the GEPF.
Members are therefore urged to ignore the rumour that is spreading that there will be no lump sum benefits payable from GEPF.