Reaching your firm’s retirement age? Here’s a step-by-step guide for claiming your funds, writes Craig Gradidge
When working with soon-to-be retirees, I find that many of them would continue to work if they had the option.
However, reducing staff complement is a challenge for many companies in South Africa, so unless a person has a scarce skill or occupies a critical position where there is no ready replacement, many companies do not offer their staff the option of working past retirement age.
For many, the option of continuing to work is based on financial reasons, because they have not saved sufficiently towards retirement.
For these clients, it is important that they remember to register for Unemployment Insurance Fund (UIF) benefits when they reach retirement age. Many of the clients I have worked with were not aware that they could claim UIF benefits when they retired.
They are often not informed by the human resources department in their company, or in some cases thought the UI-19 form was included in their exit package by mistake.
Many people are under the impression that UIF benefits are for workers who have been retrenched.
The process to claim benefits would be as follows:
. Request the UI-19 form from the human resources department;
. Complete the form and ensure that the employer signs and stamps it;
. Submit as per the details on the form;
. Register as a jobseeker with the department of labour; and
. Ensure that you apply for benefits within six months of your employment being terminated.
It is important to remember that you do not qualify for UIF benefits if you retire early.
This is a similar situation to voluntary retrenchment, which also does not qualify for UIF benefits. In both cases, you still have the option to work, but choose not to do so.
With involuntary retrenchment or when reaching the company’s retirement age, there is no option on the part of the employee, hence the claim for UIF.
These benefits are paid for a period of six months and it can take some time for the process to complete, so it is imperative that you start the process as soon as possible when approaching the retirement date.
While we are not integrally part of that process, it is part of our retirement planning to ensure that clients test their eligibility to receive UIF benefits.
This can have a meaningful effect on the client’s income planning in their first year of retirement and, as we have seen in some cases, can allow us to build additional flexibility into the overall retirement plan.
Gradidge is CEO of Gradidge-Mahura Investments. Visit gminvestments.co.za