Q: How do I obtain the necessary forms for all benefits?
A: MCPF can e-mail all the forms to you or you can print the form you need from the website (www.mcpf.co.za).
Q: I need to complete my tax assessment in time for SARS. I am still awaiting an IRP5 document. Could you kindly tell me how to obtain my IRP5 certificate?
A: You can contact MCPF on 086 111 2014 – they are responsible for general enquiries, including IRP5 certificates.
Q: When I die, what should my spouse or beneficiaries do to claim the benefits that are payable to them?
A: Your family must complete all the necessary forms and attach all the necessary documents relating to the death of a member. These forms are available at the relevant municipality’s HR department, alternatively call MCPF for further assistance or direction.
Q: Where can I obtain a (Withdrawal from the Fund) Should I then resign, the respective form can be immediately submitted.
A: If you resign, the Withdrawal must be submitted by your Human Resources department to MCPF. Should you pass away, your relatives can obtain the relevant forms from the HR department of the relevant municipality, or on our website (www.mcpf.co.za ). Alternatively, they can contact MCPF on 086 111 2014.
Q: What is member share?
A: Member share is the value of your accrued benefits in the Fund. Since MCPF is a defined contribution pension fund. It is calculated based on what you put in less the risk cost plus the interest earned.
Q: My finances have come to a crisis level and i wonder if I could borrow R10 000 from MCPF? Can you please help – I need this for my family?
A: Unfortunately, MCPF does not lend money to any member. However we do have a housing loan facility, facilitated by Standard Bank where members may access a third of their member share if they qualify as a collateral.
Q: What is the difference between a pension fund and a provident fund?
A: In a pension fund (MCPF), at least two thirds of the final benefit must be paid as a pension for the rest of the pensioners’ life. A maximum of one third of the final benefit may be taken as a once-off lump sum or cash payment if a member has attained retirement age of 60. In a provident fund, the full amount of the benefit available at retirement may be taken as a lump sum cash payment, irrespective of whether this benefit is calculated on a defined benefit or a defined contribution basis.
Q: I have worked for a private company and belonged to a provident fund there. Now that I have joined government, is my credit in the fund transferable to MCPF?
A: The rules of MCPF do allow for a person who was a member of an approved retirement fund to transfer into MCPF.
Q: Assuming I retire or resign, what are the tax implications on my benefits? Am I going to receive my whole gratuity or only part thereof?
A: Tax is payable on your benefits. Annuities are taxed as income. A part of your gratuity will be eligible for tax relief.
Q: If I were to be medically boarded, how do I go about claiming my benefits? A: Unfortunately MCPF doesn’t have the benefit.
Q: What are the definitions of the words ‘annuity’ and ‘gratuity’?
A: An annuity (or monthly pension) is an amount that is paid regularly, i.e monthly. A gratuity (or lump sum) is a single once-off payment of a benefit in cash. Benefits from MCPF take the form of an annuity or a gratuity or both depending on age or choice.
Q: What is my contribution rate and that of my employer?
A: Normal members contribute into the Fund at a rate of 13, 75% of their pensionable earnings. Employers contribute 15 % of a member’s pensionable salary to MCPF, which translate to 28.75% of the pensionable salary in line with the upper limits.
Q: Please explain the difference between a defined benefit and defined contribution fund.
A: A defined benefit fund is a fund where the benefits are defined in terms of the rules. In this type of fund benefits are generally guaranteed and are not dependent on the investment returns of the fund or on the level of employer contributions. MCPF is a defined contribution fund. A defined contribution fund is a fund where the benefits are mainly based on the accumulation of contributions plus investment returns. Benefits are dependent on the level of investment and bear the risk of poor investment returns.
Q: Is my contribution linked to inflation?
A: Your contribution is a percentage of your pensionable salary. If your salary increases, so will your contribution. The total contributions is then linked to inflation as this is a defined contribution fund.
Q: If I die, how are my benefits distributed and how can I be sure that all my beneficiaries get their rightful share?
A: If you die, a once-off cash lump sum benefit will be divided between your nominated beneficiaries in the proportions indicated by yourself on your Nomination of Beneficiaries form. It is therefore important to nominate beneficiaries and to keep your Nomination of Beneficiaries form up to date; this form is available from your Human Resources department as well as on MCPF website. This ensures that the Trustees of MCPF know who you would like to receive your death benefits.
Q: How can I find out how much I have contributed to the Fund?
A: MCPF is a defined contributions fund. This means that your benefits in the Fund is based on the amount of money that you have contributed to the Fund. However, the distribution of benefit statements, is done annually after the audit.
Q: If I am transferred from one municipality to the other, do my benefits get added together?
A: Yes. Your pensionable service will continue uninterrupted and your benefits will accumulate with service as before.
Q: When can I retire?
A: This depends on your conditions of service with your employer. Generally, conditions of service state that you may retire without any reduction of benefits at age 60. This is known as the Normal Retirement Age. Your retirement age may be different. You may also retire up to 5 years earlier -55 (this is known as early retirement).
Q: What forms do I need to complete if I want to withdraw from the Fund?
A: If, on exit from service with your employer, you want to take your withdrawal benefit in cash, your Human Resources department needs to complete a Withdrawal/Termination from Fund form. You may not withdraw from the Fund and remain in the service of any municipality as a councillor.
Q: Who bears the cost of the newsletters and publications – is it the Pension Fund; and does this mean that we earn less interest?
A: The cost is recovered from the Fund. However, since this is a defined contribution type fund, your benefits are calculated based on your contributions less operational costs plus interest.
Q: Do I have the option to invest in a private pension fund when I retire?
A: Yes when you retire and no more a councillor it is your choice how or where you transfer the money.
Q: Can I add more money to the pension fund?
A: Yes, MCPF does accept additional voluntary contributions.
Q: Will I also get my UIF contributions when I retire?
A: Unfortunately not. The Unemployment Insurance Fund is completely different from the pension fund. UIF provides for some sort of income if you are unemployed and is similar to an insurance policy.
Q: My payslip does not indicate a pension number indicates MCPF.
A: Your pension number is indicated on your membership card, certificate of membership and on the benefit quotation or statement. Please contact MCPF if you want any clarity.
Q: When I retired, I never received my unpaid leave owning to me from MCPF. How do I go about claiming this benefit?
A: Please contact your employer as they deal with leave gratuities. These are not paid out simultaneously with your pension pay out from MCPF. MCPF only handles pension-related matters.
Q: Please explain the difference between a defined benefit and defined contribution fund.
A: A defined benefit fund is a fund where the benefits are defined in terms of the rules. Benefits are generally guaranteed and are not dependent on the investment returns of the fund or on the level of employer contributions. MCPF is a defined contribution fund. A defined contribution fund is a fund where the benefits are mainly based on the accumulation of contributions plus investment returns. Benefits are dependent on the level of returns therefore the member bears the risk of poor investment returns in such funds
