PFA: Woman cannot withdraw from retirement fund before AGE 55

A woman who wanted to pay for further studies has failed in her attempt to get a retirement annuity fund to allow her to withdraw her funds before the mandatory age of 55.

The acting Pension Funds Adjudicator Dr Elmarie de la Rey has dismissed the complaint brought by V L Burjins against South African Retirement Annuity Fund (first respondent) and its underwriting insurer and administrator, Old Mutual Life Assurance Company (SA) Ltd (second respondent).

The complainant applied for and became a member of the first respondent on 13 July 2009 when she made a once off payment of R62 878.78.

When she wished to withdraw her funds from the first respondent to pay for further studies without borrowing money, the second respondent refused to accede to her request.

In its response to the Office of the Pension Funds Adjudicator, the second respondent, Said the complainant could not receive payment of the proceeds of her retirement annuity because legislation, in particular the Income Tax Act No. 58 of 1962, only permits benefits to be paid to a member upon reaching the age of 55 and before the age of 70.

Since the complainant was 31 years old when she requested to withdraw her funds, she did not qualify to receive payment of her retirement annuity. The legislation did not make an exception for members in financial difficulties. The only exception was in the case of members who became permanently incapable through infirmity of mind or body of carrying his/her occupation.

In her determination, Dr De la Rey said legislation did not permit the payment of a cash benefit to the complainant before she attained the age of 55.

“On the facts placed before me, it has been shown that the second respondent acted in

accordance with the provisions of the rules of the first respondent, the provisions of the

policy document and the provisions of the Income Tax Act.

“Therefore, the complainant cannot receive a cash payout of her retirement annuity before

attaining the age of 55,” Dr De la Rey ruled, whilst dismissing the complaint.