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The Pension Law in Pretoria, as in the rest of South Africa, is regulated by a number of prominent statutes, which include the Pension Funds Act 24 of 1956 and the Income Tax Act 58 of 1962. These statutes govern pension fund organisations, stipulate rights and obligations of plan members and beneficiaries, and set out rules for tax treatment of pension benefits. Crucially, there are also guidelines on pension division in the occurrence of divorce.
Many people seek legal help in relation to their pension for a variety of reasons. A lawyer could help you navigate challenging situations, like correctly interpreting and applying complicated pension laws, making or responding to a claim against your pension due to divorce, or resolving disputes related to your pension benefits. Indeed, disputes can arise around the calculation of pension benefits, the slashing of benefits and other illegal practices. Lawyers can also assist with estate planning involving pensions.
Under the Pension Funds Act, it's mandated that all pension funds should be registered and regulated. Any exception to this must involve specific authorization from the Financial Sector Conduct Authority (FSCA). The Act provides for the resolution of disputes, and outlines the duties and powers of the registrar and the legal processes for dealing with maladministration. Importantly, the Clean Break Principle allows for the division of pension interests upon divorce.
A pension fund provides the member with a third of the total benefit in a lump sum, and the rest is to be annuitized. With the provident fund, the total benefit may be taken as a lump sum on retirement.
According to the Clean Break Principle, your pension interest (or your ex-spouse's interest in a retirement fund) is included as part of the estate to be divided in divorce proceedings.
Normally, you cannot cash out your pension before the stipulated retirement age, except under specific circumstances as outlined by law.
Retirement funds are protected from the employer's creditors in the event of an employer's insolvency. They are separate legal entities and your pension fund should not be affected.
The FSCA is responsible for ensuring that pension fund administrators conduct their business in accordance with the Pension Funds Act and protecting the interests of pension fund members.
Consider seeking advice from the Financial Sector Conduct Authority (FSCA), or relevant trade unions which provide legal advice to their members. There are also public interest law organisations such as the Legal Resources Centre. Access to Pension Funds Adjudicator determinations and court judgments can provide further insight into the application of the law.
If you need legal assistance regarding your pension, it would be advisable to consult with a lawyer who specializes in Pension Law. Prepare as much as possible in advance, including gathering any documents related to your pension scheme, and a detailed record of your employment history. Try to define your problem clearly and be ready to explain it succinctly to the lawyer.
