Can I Withdraw Money From GEPF While Working?

Can I Withdraw Money From GEPF While Working?

GEPF does not allow any withdrawal from the pension fund while employed. However, GEPF uses the two-pot system to make the retirement plans a bit flexible. The Two-Pot Retirement System allows members of a retirement fund to access a small portion of their savings before they retire, specifically for emergencies.

The bulk of the savings will stay preserved until retirement. This system applies to any South African with a pension fund, provident fund, retirement annuity, or preservation fund.

Under the two-pot system, members’ retirement benefits are divided into two parts: a savings pot and a retirement pot. For GEPF members, one-third of the benefits, based on their pensionable service, will go into the savings pot, while the other two-thirds will be directed to the retirement pot.

Members will have the option to make one taxable withdrawal per year from the savings pot, as long as the balance has reached at least R2,000. The benefits in both pots are determined by the member’s years of pensionable service.

Can I Withdraw Money From GEPF While Working?

The new retirement fund rules are designed to provide a safety net for financial emergencies when no other options are available. However, making early withdrawals could leave you with insufficient funds for retirement, and these withdrawals are taxed at your marginal rate, which could lead to a significant tax bill. It is important to note that members are not required to access the money in the savings pot.

The GEPF strongly encourages members to keep their funds invested and wait until retirement to withdraw, as this could lead to more favourable retirement outcomes. Preserving your savings will contribute to better long-term financial security.

The Savings Pot is designed with flexibility in mind, allowing members to access funds without having to exit the fund entirely. This option provides a safety net for unexpected financial needs, helping to reduce the temptation to cash out all of your retirement savings when changing jobs or facing financial challenges.

On the other hand, the Retirement Pot is less flexible and can only be accessed upon retirement or death. This part of the fund is meant to safeguard your long-term retirement savings.

The Two-Pot System strikes a balance, giving members access to some of their savings for urgent needs while ensuring a stable and reliable income after retirement. It is an approach that meets immediate financial challenges without compromising your future financial security.

How Much is My Contribution To GPEF?

As a member of the GEPF, you contribute a percentage of your salary each month to secure your pension benefits. Your employer, the government, also makes a monthly contribution on your behalf. All GEPF members pay 7.5% of their pensionable salary into the Fund, while employers contribute 13% of that salary.

However, if you are employed by the South African National Defence Force or a government department within the intelligence community, the employer’s contribution is higher, at 16% of your pensionable salary.

For example, if you earn R4,500 a month and R3,500 of that is pensionable, your contribution to the GEPF would be R262.50, which is 7.5% of your monthly pensionable salary. On top of that, your employer would contribute R455 a month towards your pension, representing 13% of your monthly salary.

How To Claim Money From GEPF

Follow the steps below to claim your benefits from GEPF;

SELF-SERVICE ACTIVE USERS

• Open the Self-Service App or visit the website.
• Enter your username and password.
• To submit a new claim, review past claims, or track your current claim, click on the “Claims” button.
• Click on “Submit a Claim” to start a new claim.
• After selecting “Submit a Claim,” you will see the rules related to the two-pot system.
• You will be shown the amount available for withdrawal from your savings pot. To proceed, you must accept the terms and conditions.
• Use the “Withdrawal Calculator” to see how a withdrawal will affect your years of service.
• Click the “email icon” to request a withdrawal quote to be sent to your email.
• Confirm the accuracy of your banking details by clicking the confirmation button. You must accept the terms and conditions to continue.
• Confirm your income tax number. If it’s incorrect, you can update it before submitting it. You must also accept the terms and conditions to proceed.
• Click the “Continue” button to submit your claim.
• Payment will be processed within 60 working days after your claim is submitted.

NEW SELF-SERVICE USERS

• Download the GEPF Self-Service App from the appropriate app store for your device.
• Register your profile on the app, ensuring you provide up-to-date personal information, including your cell phone number and email address.
• You will receive an OTP (One-Time Password) and a temporary password via SMS or email.
• Use the temporary password to log in, then change it to a new password of your choice.
• To submit a claim, view historical claims, or track your current claim, click the “Claims” button.
• Then follow the subsequent steps starting from Step 5 in the Two-Pot Withdrawal Process for Self-Service Active Users above.

GEPF CONTACT DETAILS

Toll free number: 08 00 117 669
Fax: 012 326 2507

enquiries@gepf.co.za

Postal Address
GEPF Private Bag X63,
Pretoria,
0001

Visit the official website of the Government Employees Pension Fund for more information. I hope the provided information is helpful, share your thoughts below in the comment section.