Page 21 - TODAY magazine Issue 1 2021

1. MUST I TAKE MY PENSION
WHEN I RETIRE?
It’s the moment you’ve been working towards... but are you really ready for retirement? Andrew Davison, Head of Advice at Old Mutual Corporate Consultants, answers a few of the questions they often hear.
Q: Can I defer (delay) taking my pension? If yes, what are the minimum and maximum deferral periods, and will I be able to change them later on? A: ‘When you retire from your employer, you certainly can choose to remain in your fund as a deferred member. No minimum or maximum period applies to the length
of time you may remain a deferred member. In other words, you may decide at what point you want to convert your retirement fund savings into a monthly pension. You could also transfer the money to a preservation fund or retirement annuity. Different funds have different rules, though, so check the details of yours to be sure.’
Q: How has Covid-19 affected our current pension contributions and how is this going to affect my pension payout two years from now?
A: ‘The Covid-19 crisis is still unfolding globally, and
it is impossible to say what the economic impact will
be in the coming years. How much retirement fund savings you have at your retirement date will depend
on your contributions and the returns earned on the portfolio you’ve invested in. If you or your employer have decided to reduce or stop your contributions during the lockdown to provide you with temporary financial relief, you will have saved up less money in your retirement fund when you retire.’
Q: In Islam, will portions are predetermined, and one would generally indicate that the will must be split per Islamic determination. Can I insert that clause into my pension fund beneficiary allocation?
A: ‘You are allowed to nominate beneficiaries in accordance with Shari’ah law. However, bear in mind that the Pension Funds Act and guidelines mentioned above will still apply. The trustees will therefore take all relevant factors into account, but won’t necessarily make the distribution in accordance with your beneficiary nomination form.’
ESTATE
noun
An estate is the sum total, minus debt, of a person’s possessions, physical and intangible assets, land and real estate, investments, collectables, furniture, cash and shares.
– Investopedia.com
// 19 // ISSUE ONE 2021
YOUR DREAMS // RETIREMENT
2. CAN I LEAVE MY PENSION TO A BENEFICIARY IN MY WILL?
Although it’s important to draw up a will early in your career, it is extra important to pay close attention to it as well as estate planning as your retirement nears. Just ask Charlotte van der Merwe, Legal Adviser for Old Mutual Personal Finance.
Q: Does my will override my pension fund in terms of beneficiaries’ inheritance?
A: ‘No, it does not. Payouts to your beneficiaries or dependants are regulated by the Pension Funds Act.
The trustees of your fund therefore will have to follow certain guidelines in deciding what portion of your retirement savings your dependants or beneficiaries
will receive, if any. If you don’t have any dependants and haven’t nominated any beneficiaries, your retirement savings will be paid to your estate and dealt with in terms of your will.’