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Fund overview

The Cape Peninsula University of Technology Retirement Fund (hereafter called the CPUT Retirement Fund) was established on 1 December 1994. All full-time employees of the CPUT are required to belong to the Fund as a condition of employment.

This section deals with:

  • The key features of the Fund; and
  • The mission and values of the Fund

Key features

The Fund is a Defined Contribution Arrangement. The key feature of a Defined Contribution Fund is that the benefit you receive on retirement depends entirely on:

  • The contributions that are set aside monthly as your retirement savings; and
  • The investment return (positive or negative) you earn on this money.

In addition to providing retirement benefits, the Fund also provides resignation, retrenchment, death and disability benefits.

The CPUT Retirement Fund is also approved by SARS as a provident fund – this means that in terms of current tax legislation you can select any combination of pension and/or lump sum at retirement. More specifically, the rules of the Fund are structured so that the retirement benefit is the amount of pension that can be secured with your retirement savings. You have the option to take up to 100% of your pension as a lump sum. This gives you flexibility because you decide how much of your benefit you want as a lump sum and/or pension.

The compulsory annuitisation requirement introduced through the Government’s retirement reform process affects members of provident funds such as the CPUTRF. The proposed changes affecting provident funds are briefly as follows:

From 1 March 2021 benefits taken on retirement from a provident fund will be treated in the same way as on retirement from a pension fund. In other words, members of provident funds will only be able to take a maximum of one third as a lump sum retirement benefit, and the balance must be used to purchase a pension.

Very importantly, however, “vested rights” will apply. So, for members of provident funds aged 55 and older as at 1 March 2021, they will still be able to take their full lump sum on retirement. Furthermore, for members younger than age 55 as at 1 March 2021, the compulsory annuitisation of two thirds will only apply to their savings accumulated post 1 March 2021 (the funds accumulated up to 1 March 2021 can therefore still be taken in full as a lump sum on retirement).

Contributions to a Provident Fund are tax-deductible within certain limits. The tax treatment of contributions and benefits is explained under “Benefits”.

Mission and values

The mission of the Fund is to provide reasonable and competitive benefits as defined in the Fund’s rules.

In addition, the Fund also observes the following key values:

  • Honesty:  the Fund will always act towards its members in a transparent and honest manner
  •  Empowerment:  the Fund has a focus on providing members with education that aims to empower members to understand and control their retirement savings
  • Innovation:  the Fund aims to be at the forefront of developments in the retirement fund industry