ACTS

• The South African Schools Act, No. 84 of 1996 [SASA]
• The National Education Policy Act, 1996 (Act No. 27 of 1996) [NEPA]
• Employment of Educators Act 76 of 1998 [EEA]

GUIDELINES

• Personnel Administration Measures [PAM]

Also see: SAOU 21/2017 National Newsletter – GEPF Divorce, Information and Beneficiaries

1. Formulas for calculating pension and lump sum for educators
   • Pension contributions
     Educators who are allowed to be members of the State Pension Fund, contribute 7,5% of their salaries to the fund.
   • Termination of employment on medical grounds
     In a case of long illness, the Head of Education may determine that an educator may retire or the educator may submit such a request in the prescribed manner.  The educator’s retirement benefits are calculated according to the formula provided later.  The Head of Education acts on recommendations of the Health Risk Manager.
   • Payment of retirement benefits from the State Pension Fund
     For the calculation of all formulae, the term “end salary” is defined as the average salary notch of the member’s last 24 months of service.
   • Termination of service (less than 10 year’s pensionable service)
     If the service of a member with less than 10 years’ pensionable service is terminated for any of the following reasons:
     • Health reasons not due to own actions;
     • Abolishment or re-organisation of the post;
     • If the termination will make the Department more effective;
     • Inability to perform duties, misconduct excluded; or
     • Due to an injury or ill health caused by an accident during or as a result of the member’s duties, but not due to the member’s own actions;
       • A gratuity calculated as follows is payable:
       • 15.5 x end salary x pensionable years of service
         100
       • This amount is increased by a third, except in case of inability to perform duties effectively.
   • Termination of service (pensionable service of 10 years or more)
     If the service of a member with more than 10 years’ pensionable service is terminated for the reasons mentioned above, the following gratuity is payable:
     (a) A gratuity calculated as follows:
     6.72 x end salary x pensionable years of service
     100

   (b) Annuity calculated as follows:

   1 x end salary x pensionable years of service + R360
   55

As for:

1. • Health reasons not due to own actions;
   • Abolishment or re-organisation of the post;
   • If the termination will make the Department more effective;
   • misconduct; or
   • Due to an injury or ill health caused by an accident during or as a result of the member’s duties, but not due to the member’s own actions;
     one third of the period of pensionable service up to a maximum of 5 years, or the difference between the person’s age and 60 years, whichever is the smallest, is added.
2. Retirement (less than 10 years’ pensionable service)
   If a member retires with less than 10 years’ pensionable service:
   • On or after the retirement date;
   • Before retirement age in terms of the Act that regulates the conditions of service; or
   • As a result of the expiry of the service contract, a gratuity is payable equal to the actuarial value of the member’s pension.
3. Retirement (10 years’ pensionable service or more)
   • If a member retires with more than 10 years’ pensionable for a reason mentioned in 3 above, the following is payable:
     (a) A gratuity calculated as follows:
     6.72 x end salary x pensionable years of service
     100

   (b) Annuity calculated as follows:

   1 x end salary x pensionable years of service + R360
   55
4. If a member has reached the age of 50, but not 60, the above benefits are reduced by .33% for each month between the member’s age and 60 years.
5. Members should note that only educators appointed before 1 May 1996 and who have more than 10 years’ pensionable service, may retire between the ages 50 and 55. (The reduction of 4.2 is applicable)
6. Resignation
   Resignation benefits are calculated according to the following formula:
   • Educators below 55 years:
     Number of pensionable service years x end salary x F(z)

     Age	F(z)
     54	0.2451
     53	0.241
     52	0.2369
     51	0.2331
     50	0.2294
     49	0.2263
     48	0.2233
     47	0.2204
     46	0.2176
     45	0.215
     44	0.2125
     43	0.2102
     42	0.208
     41	0.2062
     40	0.2027
     39	0.2005

     Age	F(z)
     38	0.1983
     37	0.1961
     36	0.1939
     35	0.1917
     34	01895
     33	0.1873
     32	0.1851
     31	0.1834
     30	0.1818
     29	0.1801
     28	0.1785
     27	0.1768
     26	0.1752
     25	0.1735
     24	0.1719
     23	0.1702

   • Educators above 55 years:
     Gratuity + [A(x) x Annual pension would receive]

     Age	A(x)
     55	12.3302
     56	12.1524
     57	12.0555
     58	11.9641
     59	11.7526
     60	11.5293
     61	11.8003
     62	11.9488
     63	11.9136
     64	11.7826
     65	11.6517

   • A member may request that an amount equal to the actuarial value, calculated according to the relevant formula, is transferred to an approved retirement fund or preservation fund at resignation. Enquiries may be directed to the nearest SAOU office.
   • A member loses the following benefits at resignation, namely leave credit, pro-rata service bonus, medical-, housing subsidy and funeral benefit.
7. Benefits at the death of a member:
   • Members with less than 10 years’ pensionable service: A gratuity is payable to the greatest of the member’s actuarial value and end salary.
   • Members with 10 years’ and more pensionable service receive the following:
     (a) A gratuity calculated as follows:
     6.72 x end salary x pensionable years
     100

   (b) Five times the retirement amount he/she would have received at retirement calculated as follows:

   5x 1 x end salary x pensionable years of service + R360
   100
8. For calculation of the abovementioned gratuities, one third of the period of pensionable service, to a maximum of 5 years or the difference between the person’s age and 60 years, whichever is the smallest, is added to the years of service.
9. Spouse’s pension
   If a member is survived by his or her spouse, a spouse’s pension is paid to the spouse equal to half the annuity the member would have received if he or she had retired at the age of 60 years.
10. Benefits at the death of pensioners
    • If a pensioner passes away within 5 years of retirement, a benefit is payable to the spouse or dependants equal to the sum of the annuity payable, as calculated from the first day of the month following the death up to the last day of the month in which the 5 year period expires.  The formula is as follows:
      1 x end salary x pensionable years of service x unexpired months of 5 years
      55
11. If a pensioner is survived by a spouse, a spouse’s pension is payable equal to half of the annuity that the pensioner received at his or her death unless, at retirement, the pensioner chose a lessened monthly pension or a lessened annuity. In the last two instances (lessened monthly pension or lessened annuity) 75% of the monthly pension is payable as spouse’s pension.
12. Tax on retirement benefits
    • Pension gratuities (Resignation benefits excluded)
      Tax on pension gratuity (single amounts) is phased in from March 1998 and is calculated according to completed years of service. Exemption amounts are involved for the different ways of retirement.
    • Monthly pension
      Monthly pension benefits are taxed according to the normal tax scales.
13. Payment on funeral benefits
    As from 1 December 2002 the following members qualify for the payment of a single amount as funeral benefit at the death of:
    • A serving, contributing member of the GEPF (R7500);
    • A pensioner retired on or after 1 December 2002 (R7500);
    • A Spouse/life partner of 1 or 2 above (R7500) and
    • A dependant eligible child of 1 or 2 above (R3000)
    • In cases of a still birth, provided that the mother had been pregnant for at least 26 weeks or more.