Pensioners warned about the human cost of administrative errors

PROSPECTIVE pensioners were warned through a recent judgment by the Financial Services Tribunal to carefully read retirement paperwork because a mistake could be costly, as a Pretoria woman found out when she lost R94 000 in an irreversible tax deduction.

- ZELDA VENTER

Susan White was a member of a provident preservation fund and in January last year she elected at the age of 62 to withdraw her fund benefit. The fund, however, processed the claim as a withdrawal benefit, which resulted in a massive tax deduction.

She explained that the fund provided her with a withdrawal claim form as opposed to a retirement benefit claim form. She accordingly completed the form which had been provided to her and was paid a withdrawal benefit as opposed to a retirement benefit.

She argued that the fund incorrectly applied for a tax directive in respect of the payment of a withdrawal benefit instead of what she had requested, being a retirement benefit.