By Brett Ladouce
The lives of provident fund members will look a lot different on September 2, 2024 than it was on February 28, 2021. The reason for this is that two significant changes to legislation would have been implemented that changed the way retirement and withdrawal benefits are paid to provident fund members.
The first notable change took place on March 1, 2021. Before that date, provident fund members were allowed to receive up to 100% of their fund benefits as a lump sum cash benefit at retirement. As of March 1, 2021 fund members who were under the age of 55 years on that date are only allowed to take the accumulated retirement savings as of March 1, 2021 plus investment growth until the date of retirement (vested portion) as well as one-third of the accumulated fund contributions after March 1, 2021 and investment growth thereon until the date of retirement (non-vested portion) in cash.
Fund members who were over the age of 55 years on March 1, 2021 and who retire from that same fund at a future date will still be allowed to take 100% of their full retirement benefit as a lump sum retirement benefit when they retire. The situation that is applicable until August 31, 2024 in relation to provident fund members is illustrated in Example 1 below.
Example 1:
