Redundancy or Retrenchment Benefits

If you become redundant or you are retrenched, you are entitled to your total Fund Credit plus an additional amount financed by the employer. Payment of the relevant benefit is subject to receipt of the employer’s contribution. The additional amount is determined according to years prior to normal retirement. The maximum additional amount payable is equal to the Fund Credit.

Retrenchment benefits for members appointed on contract may vary in terms of the contract entered into between employer and employee.

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Contract Appointments

Contributions

• Members
  Members contribute at a minimum rate of 7.5% of their annual salary, which contribution is allocated in total to the member’s Fund Credit.
• Employers
  For members who joined before 1 July 2012 the standard contribution rate of employers is 22% of a member’s pensionable income. For members joining after July 2012 it is 18%. In total 3.50% is utilised to finance risk benefits (approximately 3.60%) and administration costs (approximately 0.40%). The balance of the employer’s contribution is credited directly to the member’s Fund Credit. Employers may, with the consent of members and the Management Committee, contribute at a lower or higher rate, subject to such conditions as imposed by the Management Committee.
• Contract appointments (total cost to council)
  Such members may structure their contributions according to their requirements but subject to the following minima:
• 4% (minimum) employer contribution; and
• 7.5% (minimum) employee contribution.

There are other options that may be more tax efficient, but such members are advised to contact the Fund Administrator or a tax expert to give them the necessary assistance.