By the middle of October, a total gross lump sum of R21.4 billion had been paid out in two-pot withdrawals, but members of South Africa’s largest pension fund, the Government Employees Pension Fund (GEPF), have received nothing in their bank accounts.
The Two-pot system is part of Government’s retirement reforms that will allow retirement fund members to make partial withdrawals from their funds before retirement, while preserving a portion that can only be accessed at retirement.
Most of the complaints regarding withdrawals have come from GEPF members. Many of the members expected to have received their payouts by the end of September. When they received little or no response from the fund to their enquiries, they spoke out about the process.
Payment period
Mack Lewele, Senior Manager: Communication and Public Relations at the Government Pensions Administration Agency, says they have communicated from the start that payments would be made within 60 working days from receiving a valid claim. “This is in line with our service level agreement. We are confident that we will pay all the valid claims currently with us by the end of October 2024.”
He added that they have finalised almost half of the 285 000 applications from their members who want to tap into their savings pot.
New vs the old app
The GEPF has a self-service app that enables fund members to submit their claims. The Fund believes it is the most convenient way for members as well as for the fund administrator to deal with claims. The self-service app is available on Google Play and the App Store.
The fund sets out step by step how members can download the app and register for the first time, and how to log in if they are already using the app.
“However, we are aware that some of our clients use the old version of the app and thus fail to sign in. We urge everyone to download the new app and register again,” notes Lewele.
The correct bank account
The fund administrator also advises clients not to use a new bank account as the system is set up to pay the withdrawals into the accounts GEPF members use for their monthly salary.
If members have opened a new account, it will lead to delays since the fund administrator will have to verify the account.
Members who continue to experience challenges can seek assistance from the administrator’s offices nationwide. They can also make use of the Call Centre number 0800 117 669. Additionally, members are encouraged to approach their respective Human Resources Departments for assistance.
Cautious consideration
The GEPF notes that although life can present one with unforeseen financial emergencies, members should be cautious when considering a withdrawal from their savings pot.
The new system offers members access to some of their savings for urgent needs, while protecting the steady and reliable income after retirement. It’s an approach that carefully balances the need for long-term retirement security with the ability to meet immediate financial challenges.
“Withdrawing from your savings pot can have significant drawbacks. Besides the real threat that withdrawals could lead to insufficient funds during retirement, the withdrawals are taxed at the member’s marginal tax rate, potentially leading to a hefty tax bill,” the fund warns.
Further reading
Government Employees Pension Fund (GEPF)