37D DEDUCTIONS:

Section 37D of the Pension Funds Act only allows certain deductions to be made from your benefit when you leave the fund. This is to prevent someone from using their retirement benefit as collateral and to stop creditors from eating away at money that is meant to help you live after you retire. But what is allowed to be deducted from your benefit? The Pension Funds Act specifically allows only the following deductions:

TAX PAYABLE TO SARS

Two types of tax can be deducted from your benefit:

• Tax payable on the actual benefit you are receiving

• Any tax you owe SARS from previous money or earnings you received

HOME LOANS FROM THE FUND OR THE BANK

• Any amount loaned to you by either the fund or by a bank (through the fund) that you have not paid off when you leave the fund can be paid back to the fund or bank

• If you have a home loan from your employer, the fund can also pay any outstanding amount to your employer. However, the fund will need evidence that any loan given to you was specifically for housing purposes

AMOUNTS OWED TO YOUR EMPLOYER

• Your benefit can be used to pay any compensation due to your employer if your employer has suffered a financial loss due to your involvement in fraud, theft, dishonesty or misconduct

• Before the deduction can be made you have to either sign an acknowledgement form stating that you owe the employer a specific amount and the reason for this or you have to be convicted on the charges brought against you by your employer

• Because the criminal justice system works so slowly, if your employer brings charges against you, the fund can hold your benefit or a portion of your benefit until the case is finalised

MEDICAL AID

• The only time medical aid contributions can be deducted from your benefit is if the fund has paid or will pay those contributions to a recognised medical aid on your behalf

INSURANCE PREMIUMS

Insurance premiums can also be deducted from your benefit is if the fund has paid or will pay those premiums to an insurer on your behalf

ANY AMOUNT APPROVED BY THE REGISTRAR

The fund can also deduct any amount for any reason approved by the Registrar, but only if the fund requests this in writing from the Registrar

MAINTENANCE ORDER (This can be deducted from your money in the fund before you leave the fund)

• The fund can also deduct any amount the fund is required to deduct in terms of a maintenance order

DIVORCE BENEFITS (This can be deducted from your money in the fund before you leave the fund)

• The fund can deduct any amount that the fund is ordered to pay to an ex-spouse in terms of a divorce order

This is a list of the only things that are allowed to be deducted from your benefit when you leave the fund. Deductions will be made in date order and will be taken off your benefit until there is either no more money or no more deductions. The retirement fund is not allowed to reimburse another party, like a bank or company, for funeral costs, personal loans, car loans, study loans or credit cards.