This blog post will provide a comprehensive overview of the benefits available upon resignation, the options for payout, and the application process. Whether you’re considering resigning or just curious about the process, this guide will help clarify your options and obligations.
Benefits on Resignation
Upon resignation, members can choose between two options for their GEPF resignation payout:
- Cash Resignation Benefit: This option allows members to receive a cash lump sum payment deposited directly into their bank account.
- Transfer to an Approved Pension Preservation Fund: This option enables members to transfer their pension benefit into an approved fund, ensuring that they continue to save for retirement while deferring tax payments.
Option 1: Cash Resignation Benefit
If a member opts for a cash resignation benefit, the following steps and documentation are required:
How to Apply for the Cash Resignation Benefit
- Documents Required:
- A certified copy of the member’s bar-coded ID or valid passport (not older than six months).
- A completed Personal Details form (Z864).
- A completed Banking Details form (Z894).
- A completed Resignation Choice form (only for resignation, not discharge).
- For married members, a certified copy of the marriage certificate.
- If divorced, the divorce order and settlement agreement, along with a certified copy of the ex-spouse’s bar-coded ID and their Banking Details form if applicable.
- Certified copies of birth certificates for children, if any.
- Submission: The Human Resources (HR) department must complete the Withdrawal from Fund Application form (Z102) and submit it along with all required documents to GEPF.
Once processed, members will receive a cash lump sum, after tax deductions, deposited into their bank account.
Option 2: Transferring to an Approved Pension Preservation Fund
Opting to transfer the resignation benefit to a pension preservation fund can be advantageous. By choosing this route, members can avoid immediate tax implications, as tax is deferred until they eventually withdraw funds from the new pension preservation fund.
Advantages of a Pension Preservation Fund
- Retirement Savings: Members are required to keep at least two-thirds of the transferred amount until retirement, ensuring long-term financial security.
- Tax Benefits: No immediate tax is payable upon transfer.
How to Transfer to an Approved Pension Preservation Fund
To facilitate a transfer, the following documentation is required:
- Documents Required:
- A certified copy of the member’s bar-coded ID or valid passport (not older than six months).
- A completed Transfer Application form (Z1525) signed by the member and a representative of the new pension fund.
- A completed Personal Details form (Z864).
- A completed Resignation Choice form (only for resignation).
- A certified copy of the marriage certificate for married members.
- Divorce-related documents, as mentioned in the cash benefit section.
- Certified copies of birth certificates for children, if any.
- Submission: Similar to the cash benefit, the HR department must complete the Withdrawal from Fund Application form (Z102) and submit it with all other documentation to the GEPF.