Current Members FAQ

The provident fund is a DEFINED CONTRIBUTION FUND. Under this type of scheme both the employers and members pay a fixed monthly contribution to the Fund. The ultimate benefit which a member or beneficiary receives is a lump sum based on the member’s own contributions, a percentage of his employer’s contributions and interest and profits credited to his account during the period of his membership.



Because there is neither a pension nor post-retirement benefit payable to the member or his dependants the lump sum benefit under a provident fund is greater than that which pertains to a pension fund. The pension funds, which are DEFINED BENEFITS FUNDS, make provision for the guaranteed payment of a lump sum, and pension and post-retirement benefit to a member and/or his dependants against the regular monthly contributions which the member and his employer make to the fund. 



To summarize, the provident fund pays benefits in the form of a lump sum, the amount of which is uncertain as it is determined by the investment return of the fund and level of contributions. The pension funds however offer a guaranteed benefit in the form of a lump sum, pension and post-retirement payment.

Yes. It is a condition of employment that an employee elects to join either the KwaZulu-Natal Joint Municipal Provident Fund, the Natal Joint Municipal Pension Fund (Superannuation), the Natal Joint Municipal Pension Fund (Retirement) or the KZN Municipal Pension Fund. An employee may only elect to join the KZN Municipal Pension Fund if the employee is employed by a local authority associated with said Fund in terms of its regulations and it must be noted that the provision to transfer your membership in the future, does not apply to employees who are members of the KZN Municipal Pension Fund.

17 Years

Your membership is automatic and commences immediately when you start work.

57 Years. 
A person who has attained age 58 may elect to join the Fund provided that his employer is in agreement.

65 Years.

Within 3 months of becoming a member.

Benefit statements are distributed annually to all the members of the Fund but members can also request a statement once more during the financial year.

These statements reflect what a member can expect to receive in the event of resignation, retirement, ill-health and death.

The lump sum payment is paid within 3 months after being exited by the employer.

Yes. There are two types of transfers:

a) First Election
If a member has joined the Fund prior to 01 June 1996, the member will have to notify the Natal Joint Municipal Pension Fund before 31 December in order to transfer 01 July the following year.

b) Second Election
These are members transferring for the second time or joined the Fund after 01 June 1996. They will have to give the Fund 12 months’ notice.

Members should note that their benefit will be subject to tax when transferring from the Superannuation Fund to the Provident Fund. Therefore, members should carefully consider the investment objectives and risks, of each Fund before making a final decision.

The member must complete 5 years in each Fund before they can elect to transfer.

This is where the member must indicate who of his or her dependents should receive their benefit in the event of death.

Members can complete a Nomination form with the beneficiaries’ full names, identity document numbers and state the relationship status between them and the nominee.

A member must inform the Fund if there are any changes to their member status by completing a beneficiary nominations form or through written correspondence. It is imperative that members review their status regularly and advise the Fund accordingly.

Within three months of commencing employment, the member must undergo a medical examination with the municipal appointed doctor. The exam will test the member’s medical fitness and an X-RAY will be required.

Failing to undergo a medical examination will result in the restriction of a member’s benefit if he or she should die within ten years of service. Where the member has an existing illness, a full benefit will not be awarded in the event of death in relation to that illness. If the member dies of unrelated causes, the restriction may not apply and a full benefit is payable.

The member or the doctor can post the medical certificate back to the Fund; all member information is kept strictly confidential. After receiving the examining report, the Fund may write back to the member if any follow-ups are required.

The fund and the employer will jointly bear the cost for this examination.

SECTION 19 OF THE PENSION FUND ACT

As a service to its members the Fund has made housing loans available to members of the Fund in accordance with Section 19 and the Pensions Fund Act for use solely to do the following:

To renovate/repair an existing dwelling
To buy land
To buy a house

The loan is granted to the member by an approved bank on condition that the Fund secures the loan by pledging up to a maximum of 50% of a member’s benefit as surety.

Step 1: The member undergoes a credit assessment by the bank to determine whether the member qualifies for and the amount that the member qualifies for.
Step 2: The bank emails the loan verification form to the loans clerk at the Fund.
Step 3: The loans clerk will check the member data, do resignation calculation, verify loan amount applied for and complete bank form. The loan enquiry is recorded on member’s record.
Step 4: The bank sends formal application with supporting documentation to the Fund.
Step 5: Loans clerk checks that the amount on the document is the same as on original loan verification form. The loan details are then captured on the member’s record. The loan should be taken by the member with an approved financial institution which currently is FNB and Ithala bank.

Once the member has received the loan, he or she will have to make an agreement with the bank if they have the financial means to repay their loan. Members must note that there will be tax implications should they choose to take a loan using the Fund as a surety and their benefit will be reduced.

Should the member pass away or resign before completing the payment, the Fund will pay the outstanding balance to the bank before paying the death or resignation benefit.

It is a member’s final salary.

Your contributory service is normally the period in respect of which you have contributed to the Fund i.e. from the date you entered the Fund until the date your services terminate, including whole months, but excluding portions of a month.