BENEFITS PROVIDED BY THE FUND
This section of the member guide deals with the benefits provided by the Political Office-Bearers Pension Fund for its members. The next section covers some additional benefits for Fund members that are not actually provided through the Fund or specifically dealt with in the Fund Rules – these are included in this guide because the cost of these benefits is also part of the total contributions paid by the State for member’s retirement and related benefits.
The areas covered in this section are:
- The design of the Fund
- The contributions payable by you and by the State
- What benefits you will receive when your term of office ends (on retirement or resignation)
- What benefits your dependants will receive (from the Fund) if you die in office.
The Political Office-Bearers Pension Fund is a Pension Fund, which means that if you take a retirement benefit (your Fund Credit) from the Fund when you leave office, you may take up to a maximum of 1/3rd of your Fund Credit as a cash lump sum. The balance of your retirement benefit must be used to buy a pension from an insurance company.
At what age can I retire?
In terms of the Fund Rules you are permitted to retire at any time from age 50 onwards (or earlier if you are forced to leave office on the grounds of ill-health).
Put differently, this means that, if you are 50 or over when your term of office ends, you can choose to take your Fund benefits in the form of a retirement benefit (pension).
What is my retirement benefit, and how can I receive this benefit?
On retirement, the benefit is your FUND CREDIT as explained earlier in this section. (There may also be additional gratuity amounts paid by your legislature, as discussed in the sections below – we will not deal with these here.)
The Political Office Bearers Fund is a Pension Fund, and because of this you can receive up to a maximum of 1/3rd of your retirement benefit as a cash lump sum. The rest of your retirement benefit must then be used to buy a pension from a registered Insurance Company. The tax treatment of the lump sum and the pension is described in the section of this guide titled "Taxation of Benefits".
Once you have received your retirement benefit, your membership of the Fund ends. This means that you and your dependents have no further claim for benefits against the Fund, including insured death and disability benefits.
At retirement you therefore face two important choices, namely:
- How much of your benefit should you take in cash?; and
- What type of pension should you receive in retirement?
These two issues are dealt with in a further section of this guide titled “Options at Retirement”.
What is my retirement benefit on ill-health early retirement, if I do not qualify for an insured Disability Benefit?
If, after considering such medical evidence as they may reasonably require, the Trustees are satisfied that you have become permanently and totally incapable of continuing with your duties as a political office-bearer, but you are not covered by the Disability Benefit insurance, you may retire early at any time before the normal minimum retirement age of 50. The full amount of your Fund Credit will become available to you to buy a pension, as described above (you also have the option to take up to 1/3 of this in cash, before tax). The tax treatment of the lump sum and the pension is described in the section of this guide titled "Taxation of Benefits".
This guide includes a summary of the Rules of the Fund and the insurance policies that provide certain benefits for members and their dependents. In the event of a conflict between this guide and the Rules or the insurance policies, the Rules or the insurance policies (as the case may be) will take precedence.
The information in this guide does not constitute advice by either the Board of Trustees or its professional advisors. Members are encouraged to seek expert advice from a personal financial advisor before taking decisions regarding their benefits from the Fund.
The Fund will try to ensure that the material in this guide is up to date and accurate, but this cannot be guaranteed at all times.