Withdrawal Options

Leave your benefit in the UCTRF (Deferred Pensioners)

If you leave your money in the UCTRF, you may receive your Retirement Benefit at any time from age 55 onwards. Alternatively, you may transfer your funds into another fund or take you benefit in cash at a later date.

Your Accumulated Retirement Savings will remain invested in the portfolio/s of your choice. Administration costs will be deducted from your Accumulated Retirement Savings monthly. You also have the advantage that the Board monitors the performance of the investment managers with whom your money is invested on an ongoing basis. Should you elect this option you will be required to preserve your benefit as a whole, i.e. you may not take a portion in cash and leave the balance in the UCTRF.

Take your money in cash

This is a tempting option for most of us; however, this might mean the difference between a retirement of leisure and one filled with financial worries.  If you take your money in cash, you may also pay a significant amount of tax, as only a small portion is tax free. Please refer to the Taxation of Benefits section.



Transfer your money to your new Employer’s Pension and/or Provident Fund

When you transfer money between two Pension Funds, the transfer is tax free.  The same goes for transferring money between two Provident Funds, and also for transfers from a Provident Fund to a Pension Fund.  However, it is important to note that if you transfer to a Pension Fund then you will lose the option to take the full benefit in cash on retirement.


Transfer your money to a Retirement Annuity Fund

Transferring your money from the UCTRF to a retirement annuity fund on withdrawal is tax free. There is a range of retirement annuity funds to choose from with an assortment of different investment options.  Speak to your financial advisor on the different options available to you.  A retirement annuity works exactly like a Pension Fund, in that at retirement you will only get one-third in cash and the balance must be used to purchase a lifelong pension from a registered Insurer.  You may make monthly contributions towards a retirement annuity, which are tax deductible up to certain limits.


Transfer your money to a Preservation Pension or Preservation Provident Fund

There is a range of Preservation Funds to choose from with an assortment of different investment options.  Speak to your financial advisor on the different options available to you.  There are Preservation Pension and Preservation Provident Funds, so you may decide to transfer your benefit from this Provident Fund to a Preservation Provident Fund.  This is a tax-free transfer.

When you retire from a Preservation Provident Fund, you can take the entire amount as a cash lump sum.

You can retire from a Preservation Fund between the ages of 55 – 70 years. You may not make monthly contributions towards a Preservation Fund.

You can transfer from one Preservation Fund to another, but there are costs involved. 

The main disadvantage of this option is that your costs are higher when compared to leaving your money in the UCTRF.  You could pay commission at entry and the ongoing administration fee could be as high as 0,5% per annum of the market value of your assets. The investment management fee could be as high as 1,5% per annum of the market value of your investment. 

You (or your advisor) also need to monitor the performance of the investment managers with whom your money is invested on an ongoing basis.

Differences between the various options  

 

Cash Benefit

Leave Benefit in UCTRF (Deferred Pensioner) 

New Employer's Provident Fund

New Employer's Pension Fund

Retirement Annuity

Preservation Pension or Provident Funds

Monthly Contributions allowed

n/a

No

Yes

Yes

Yes

No

Future withdrawal allowed

n/a

Yes

Yes, but only on resignation, retrenchment, or dismissal from new Employer

Yes, but only on resignation, retrenchment, or dismissal from new Employer

No – may only retire after age 55

Yes

Benefit Taxed

Yes

No

No

No

No

No

Retirement Benefit

n/a

Entire amount in cash or a pension or a combination of above

Entire amount in cash or a pension or a combination of above

May take 1/3 cash, balance pension

May take 1/3 cash, balance pension

As per Pension / Provident Fund

 



Our Contact Details

 



Enquiries

021 650 2934

Please send all comments or questions to:
UCTRF-enquiries@uct.ac.za

Fund website:
www.uctrf.co.za