The reduction is a result of a revised rate of tax for pensions imposed by Sars
05 October 2022 - 11:31
byLinda Ensor
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Workers resort to resigning from their jobs to cash in their retirement savings to deal with these shocks in their lives, says the writer. Picture: 123RF/FLYNT
The Government Employees Pension Fund (GEPF) decreased the pensions of some of its members at the end of September due to a revised rate of tax implemented by the SA Revenue Service (Sars).
This followed a directive from Sars that provided for a revised rate of tax to be deducted from pensioners’ monthly pension payments.
“The impact on the tax paid by pensioners is as a result of changes to the revised tax rate (PAYE) as notified by Sars. It is important to note that this only applies to pensioners who receive more than one source of taxable income in addition to their GEPF pension, that is the income sources as reflected on the Sars tax system,” the GEPF said in a statement.
“The GEPF reiterates that pensioners have the option to opt out of the revised tax rate provided by Sars and revert to the normal PAYE rate applicable to their pension.
“It is important to note that this choice will result in the GEPF continuing to deduct tax as in previous months and not in the more accurate effective tax rate as provided by Sars. This may result in pensioners having to settle a tax debt with Sars at the end of the tax year. Choice forms will be sent to affected pensioners and will also be available at GEPF offices.”
Not all pensioners were alerted to the reduction with Tshwane-based retired national archivist Graham Dominy being shocked by the unannounced 10% reduction in his monthly pension at the end of September.
The GEPF said in its statement that “prior to implementing the revised rate of tax, the Government Pensions Administration Agency (GPAA) wrote to all affected pensioners using the contact details that GPAA has, informing them of the choices they have. Some pensioners might have not received the correspondence or did not fully understand the choices/options they had.”
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
GEPF reduces pensions of some members
The reduction is a result of a revised rate of tax for pensions imposed by Sars
The Government Employees Pension Fund (GEPF) decreased the pensions of some of its members at the end of September due to a revised rate of tax implemented by the SA Revenue Service (Sars).
This followed a directive from Sars that provided for a revised rate of tax to be deducted from pensioners’ monthly pension payments.
“The impact on the tax paid by pensioners is as a result of changes to the revised tax rate (PAYE) as notified by Sars. It is important to note that this only applies to pensioners who receive more than one source of taxable income in addition to their GEPF pension, that is the income sources as reflected on the Sars tax system,” the GEPF said in a statement.
“The GEPF reiterates that pensioners have the option to opt out of the revised tax rate provided by Sars and revert to the normal PAYE rate applicable to their pension.
“It is important to note that this choice will result in the GEPF continuing to deduct tax as in previous months and not in the more accurate effective tax rate as provided by Sars. This may result in pensioners having to settle a tax debt with Sars at the end of the tax year. Choice forms will be sent to affected pensioners and will also be available at GEPF offices.”
Not all pensioners were alerted to the reduction with Tshwane-based retired national archivist Graham Dominy being shocked by the unannounced 10% reduction in his monthly pension at the end of September.
The GEPF said in its statement that “prior to implementing the revised rate of tax, the Government Pensions Administration Agency (GPAA) wrote to all affected pensioners using the contact details that GPAA has, informing them of the choices they have. Some pensioners might have not received the correspondence or did not fully understand the choices/options they had.”
ensorl@businesslive.co.za
Treasury makes major concessions on retirement reform
PIC defies CCMA by pushing ahead with replacing fired finance chief
UIF and Compensation Fund halt new investments in unlisted assets
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
LETTER: Politicising pensions
LETTER: PIC alliance with ANC means more losses
LETTER: Pension money will flow to Eskom
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.