The following applies to each category of your retirement savings:

If you were 55 or older on 1 March 2021 (i.e. you were born before 1 March 1966) and have been a member of The Hospitality and General Provident Fund since then, your options are slightly different, unless you opted into the Two-Pot System. If you have not opted into the Two-Pot System, you may take the full withdrawal benefit in cash, subject to tax in line with the tax table for withdrawal.

Resignation

If you resign, you will be entitled to your actuarial reserve value.

Retrenchment or Redundancy

If you are retrenched or made redundant you will receive your actuarial reserve value. If you have reached aged 50, you may opt for the early retirement benefits instead of the lump sum.

What can I do with my money, if I resign, get retrenched or become redundant

If you leave the Fund before retirement due to resignation, retrenchment or dismissal, you have the option to leave your money in the Fund. 

When you leave the employer, these are the options available to you:

1. Leave all your money in the Fund (this option would apply for your entire benefit and no portion of the benefit may be taken in cash or transferred to another approved retirement Fund. Only outstanding housing loan balances can be offset against the benefit);
2. Move your money to a preservation Fund;
3. Move your money to a retirement annuity;
4. Move your money to your new employer’s Fund; or
5. Take a portion of your money in cash (subject to tax as per the current legislative tax scales)

You should always keep your retirement savings for its real purpose – to provide you with a retirement benefit. If you take cash on leaving the Fund before retirement you may have to pay tax. You can avoid paying tax at this time by following options 1-4 above and preserving your investment. 

What benefits will you receive?

You will receive the total of all your contributions to the Fund until the date you leave, minus any costs, plus interest. Remember, the employer's contribution also covers the costs for Death, Disability, TIP, and Funeral Benefits. 

Concerned about penalties for early withdrawal?

Our Fund levies NO penalty, but be mindful that SARS taxes early withdrawals more heavily than retirement Funds. For instance, in the 2021/22 tax year, you start paying tax from R25 001 on withdrawals, whereas you enjoy a R500 000 tax-free benefit on retirement.

What about Paid Up and Transfer Options?

Yes, they're available.

Can you continue your death benefit option after leaving?

Unfortunately, no.

What about the interest return on withdrawals?

It's calculated the same as for retirement.

Click here for more information on the Taxation.

Taking cash on withdrawal before retirement will also make it difficult for you to meet your retirement goals. Talk to a financial advisor before you take your money in cash.  Click here if you need a financial advisor.