Public servants retiring to cash in on pensions

HUNDREDS of Eastern Cape nurses, police officers and teachers are retiring early to raid their pension funds.

This is because of ongoing rumours that the government is planning to nationalise the Government Employees Pension Fund (GEPF).

The government said last year it would be introducing a compulsory pension scheme which would prevent civil servants from withdrawing their full pension savings on leaving state employment.

While the rumours of nationalisation have been dismissed by Finance Minister Nhlanhla Nene, unions in the province say employees are still resigning to access their money before March.

At least 14000 state employees have resigned since the rumours flared up, although the education, health and police departments could not say exactly how many in their respective sectors had left.

From March, provident fund members will be required to convert at least two-thirds of their savings into an annuity or pension on retirement, instead of receiving the entire lump sum in cash as in the past, according to the Taxation Laws Amendment Act of 2013.

"All provident fund members will still be able to take all their retirement savings accumulated as at March 1 2015 as a cash lump sum whenever they go on retirement," a Treasury fact sheet states.

Public hospitals around the Eastern Cape are losing eight to 10 experienced nurses a month who are resigning in the mistaken belief that they stand to lose their pension benefits.

This is according to Democratic Nursing Organisation of SA spokeswoman Xoliswa Tota, who said the union was concerned about the trend. - Gareth Wilson, Zandile Mbabela and Estelle Ellis