My Options if I Resign
What happens to my retirement money if I leave Woolworths?
Before you resign, you will need to decide what you want to do with your retirement fund investment. Remember, the aim of a retirement fund is to provide you and your family with financial security when you retire and are no longer able to work. The only way to achieve financial security is to save. You are therefore encouraged to consider an option that will help you achieve this in the long term.
When you resign you have two options:
1. Preserve your Fund Credit
This will help you to achieve financial security after retirement. You can preserve the savings that you have built up while working for Woolworths through one of the following retirement vehicles:
a) The Woolworths Preservation Option
This has been designed specifically to continue to look after your investments under the same investment strategy as the one used prior to your withdrawal. This is one of the cheapest ways for you to preserve your funds. If you have a housing loan you will need to settle prior to the transfer taking place.
b) Any other preservation fund
This is likely to be a more expensive option than using the Woolworths Preservation Option and you will need to settle any housing loan prior to transfer taking place.
c) Your new employer’s pension fund
You will need to discuss this with your new employer prior to transfer and establish their policy regarding housing loans, if applicable.
d) Any retirement annuity fund
You will need to settle any housing loan prior to transfer.
2. Take your Fund Credit in cash
but tax will be deducted before your Fund Credit is paid to you, thereby significantly reducing its value. You may take part of your Fund Credit in cash and transfer the balance to a retirement annuity fund, in which case you will only pay tax on the cash withdrawal.
You may also convert your current Fund death benefit, your disability benefit and your Group Life Assurance (GLA) to private membership. The attraction of doing this is that you won’t need to have a medical examination, but you will need to provide your latest HIV test results. The procedure is as if you were buying cover in your personal capacity.
You are advised to call the Alexander Forbes Advice Centre on 0860 100 983 prior to leaving the company in order to obtain professional advice on the various options available to you.