If you leave office and take benefits before age 50 (except if you retire early because of ill health), your benefits will be paid to you in the form of a resignation benefit. Similarly, even if you are 50 or over when you leave office, you have the right (at any age) to choose to take your benefits in the form of a resignation benefit, instead of a retirement benefit.
This section deals with:
- The benefit you will receive from the Fund if you resign
- The options you have with your resignation benefit
You have the following options in respect of the resignation benefit:
- You can choose to receive your entire benefit as a cash lump sum (subject to tax);
- You can preserve your benefit for your later retirement - i.e. transfer your Fund Credit to an approved Preservation Pension Fund, Retirement Annuity Fund, or your new employer’s pension fund;
- You can take part in cash (subject to tax) and transfer the balance to another fund;
- You can choose to leave your Fund Credit in the Political Office-Bearers Pension Fund – in other words you choose to become what is called a “deferred beneficiary” of the Fund. (This is also what will happen if you do not give any instructions to the Fund when you leave office - you will become a "deferred beneficiary" automatically. However, you'll have the option at any time thereafter to take your Fund Credit in cash or transfer it to another fund, or to take a retirement benefit from the Fund once you reach age 50.)
Note: If you have a housing loan (bond) in respect of which the Fund has to honour a guarantee given to the mortgage lender (the bank), the amount owed to the bank and any tax payable on this amount will be deducted from your Fund Credit when you leave office, even if you continue as a deferred beneficiary of the Fund.
The issues to consider in deciding what to do with your resignation benefit are quite complex. The next section deals with these options in more detail.