Question

I hope you can help me.

I resigned from TMS Group, which is part of the Bidcorp Group at the end of March this year. I was a member of their Provident Fund for about 2 years and I also transferred my monies from my previous employer's fund to this one.

To avoid paying tax on my retirement savings I want to transfer all monies to an Allen Grey Provident Preservation Fund. (My new employer only has a Retirement Fund so I cannot transfer to their Fund.)

I was told there needed to be a 'link' between the two, which was duly organised with my HR department.

I have now been told that I may only transfer to the Funds that have been 'chosen' by the Provident Fund that I am leaving. I have spoken to various people, including a helpful gent at the FSB Call Centre and no-one has heard of this 'rule' that basically means I cannot transfer my money to the Provident Preservation Fund of my choice. (Apparently, I can pick any Retirement Annuity, but that's not the point!)

I've attached e-mails in this regard.

Do the Trustees of Bidcorp's Provident Fund have a right to restrict where I transfer my monies? If they do, surely when I transferred my monies from the previous fund I should have been made aware of this?

Any assistance will be highly appreciated.

Answer

FINANCE

With some of the older funds who moved from pension platforms to provident platforms, the joining of the fund values are sometimes presented as one but as I understand it has to be administered as two seperate values as it is viewed with different legislation. In this case my gut tells me that it might better to move to another R/A as the R/A is not sensitive to where the money comes from.

Of course, the advantage of the R/A is that you can add premiums but the advantage of the preservation fund is that you have access to your funds (taxed then of course) before retirement which is sometimes good to know if an emergency comes along. If you can get hold of the rules of the fund and also find an advisor knowledgeable in interpreting the fund rules to help you communicate with them.

- Charné van der Walt