According to the Eskom Pension and Provident Fundwebsite, as of 2020 there were 2211 members belonging to the EPPF’s Deferred Pension Scheme. If you are one of these members, there have been updates to the Eskom Pension and Provident Fund rules that affect you and that you should know about.
Eskom Pension and Provident Fund (EPPF)
What is the Eskom Pension and Provident Fund?
The EPPF provides retirement fund administration services for its members. As the second-largest pension fund in South Africa it manages assets for its members valued at over R140-billion. The Eskom Pension and Provident Fund handles retirement fund administration for the three participating employers: Eskom, Eskom Rotek Industries, and the Eskom Pension and Provident Fund. It has a total of roughly 85 000 members, pensioners and beneficiaries.
What are the Eskom Pension and Provident Fund rules?
While working for the national power utility, employees belong and contribute to the Eskom Pension and Provident Fund. All in-service members who exit their employment have the choice of leaving a portion or their entire benefit where it sits in the EPPF’s Deferred Pension Scheme until retirement. There is also the option of taking the maximum tax-free amount (currently R25 000) in cash and deferring the balance in the EPPF’s Deferred Pension Scheme.
In making this move you become a deferred pensioner of the EPPF. Previously, once you’d become a deferred pensioner your funds were untouchable until the age of 55. This was an important Eskom Pension Fund rule that sought to safeguard your accumulated retirement savings, while maintaining the integrity of the Fund as a whole. These rules have changed.
The following rules apply should you now wish to withdraw from the Eskom Pension and Provident Fund
As a deferred pensioner, you can now either withdraw your entire deferred pension value as a cash lump sum payout or request that it be transferred to another approved retirement fund of your choice. However, this election must be made before you turn 55.
How do you withdraw your deferred pension sum from the Eskom Pension and Provident Fund in 2022 onwards?
There are five steps that need to be followed if you are living overseas currently –
- Approach the Fund requesting your withdrawal.
- Ensure that your tax record at the South African Revenue Services (SARS) is active and up to date (i.e: you are tax compliant).
- Ensure you have an active bank account in South Africa. (we can assist with Non-Resident Bank Accounts).
- Seek exchange control advice from a cross-border financial service specialist on how best to use your annual exchange control allowances.
- Transfer your funds abroad, once you have paid the necessary taxes on retirement lump sum cash payouts to SARS.
FinGlobal: cross-border financial specialists for South African expats
Don’t know where to start on the withdrawal process to access your deferred pension from the Eskom Pension and Provident Fund? Need someone to handle all the paperwork for you? FinGlobal can help you every step of the way. From notifying the fund of your intention to withdraw, to handling your tax compliance status and setting up a non-resident bank account, we can assist you to withdraw your funds and safely transfer it to you anywhere in the world.
Leave us your contact details and we’ll be in touch to discuss your best options when it comes to moving your Eskom Pension Fund payout out of South Africa.