The Eskom Pension and Provident Fund provide benefits to its members during their various life stages. We invest contributions for in-service members to provide for their retirement when they go on pension and for ill-health retirement. Withdrawal benefits are also provided to in-service members when they leave the service of the employer. On withdrawal, in-service members have the option to withdraw their benefit or a part thereof, or preserve the benefit in our Deferred Pension Scheme and become a deferred pensioner of the EPPF until they retire from the Scheme.

We also offers death benefits for its in-service members, pensioners and deferred pensioners, which become payable to their beneficiaries when they pass away.

This section explains all the benefits payable by the EPPF during the various life stages and provides information relevant to each of our member categories.​

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 Retirement benefits

Normal Retirement

The EPPF's compulsory retirement age is 65 years. However, in-service members may retire early from age 63 without penalties, subject to the employer's conditions of service. The benefit is based on 2.17% of the in-service member's  annual average pensionable salary over the last year before retirement, for each year of pensionable service.  

Early Retirement

An in-service member may retire early after reaching age 55 years. The benefit is a pension calculated in terms of a pension formula, reduced by the penalty factor of 3.9% per year for each year before age 63 years.

Ill-health retirement

An in-service member may retire at any age as a result of ill-health, provided that the Board of Trustees approves a recommendation by the EPPF Medical Panel in this regard. The benefit is calculated by making provision for a pension based on the in-service member's pensionable salary and pensionable service accrued up to the actual retirement date plus 75% of the service that would have been completed by the in-service member from that date to the pensionable age.


 

 Death benefits before retirement

Death before retirement

On the death of an in-service member, a lump sum equal to twice the member's annual pensionable salary is payable and distributed in terms of the provisions of Section 37C of the Pension Funds Act.

Plus

A widow/widower's pension of the first 60% of the in-service member's potential pension is payable to the deceased member's spouse. The pension is calculated as if the in-service member had remained in service and attained age 65, based on the current pensionable salary.

Plus

A child's pension of 30% of the pension to which the in-service member would have been entitled if he/she had remained in service until the normal retirement date, in respect of one eligible child. The children's pension will increase to 40% in respect of two or more eligible children.

If there are no spouse's or children's benefits payable, a benefit will be paid to the in-service member's estate equal to the greater of:

-A lump sum equal to the in-service member's annual pensionable salary;

Plus

-10% of the final average pensionable salary per year of pensionable service;

Or

Twice the in-service member's annual pensionable salary.​

 

 Death benefits after retirement

Death after retirement

On the death of a pensioner, a lump sum equal to R3000 is paid to the surviving spouse or the estate;

Plus

A pension to the surviving spouse equal to 60% of the deceased pensioner's pension at retirement before commutation, including any subsequent increases;

Plus

A further pension of 30% (for one eligible child) or 40% (for two or more eligible children) of the deceased pensioner's pension at retirement before commutation, including any subsequent increases, in respect of any eligible children.

If there is no spouse's pension payable, the percentage in respect of a single eligible child is increased to 60% of the deceased pensioner's pension at retirement before commutation, including any subsequent increases. For two or more eligible children, the total percentage is increased to 100% of the deceased pensioner's pension at the time of retirement before commutation, including any subsequent increases.

If there are no spouse's or children's benefits payable, a benefit equal to the excess amount of the lump sum, as specified below, over the total benefits paid to the pensioner until the time of death is paid to the estate. The lump sum comprises the following:

-A lump sum of R3000;

Plus

The greater of the two following calculations:

i. Twice the annual pensionable salary at retirement, less the pension benefits received since retirement;

Or

ii. The annual pensionable salary at retirement plus 10% of the final average pensionable salary per year of pensionable service, less pension benefits already received.

 

 Death benefits for a deferred pensioner

Death before retirement from the Deferred Pension Scheme

If a deferred pensioner passes away before drawing a retirement from the Deferred Pension Scheme, the lump sum benefit in the scheme (transfer value, plus interest) will be allocated to his/her beneficiaries in terms of Section 37C of the Pension Funds Act. This means that the EPPF will conduct an investigation to verify whether the deferred pensioner had legal dependants (such as a spouse whom he/she married before deferring the benefit; minor children or adopted or posthumous children), or factual dependants (such as parents or a family member who is financially dependent on the deferred pensioner).

The EPPF has up to 12 months to investigate and make a determination on the distribution of the benefit.

If the deferred pensioner has no dependants, the benefit will be paid to the deferred pensioner's estate.

No further benefit be payable from the EPPF.

Death after retirement from the Deferred Pension Scheme

If a deferred pensioner passes away after retiring from the Deferred Pension Scheme, the following benefits will be payable:

  • A pension equal to 60% of the current pension at the date of death;

Plus

  • A further 30% of the pension if there is an eligible child (under 21 years), and an additional 10% if there are two or more eligible children.

The surviving spouse must be a spouse whom the deferred pensioner married prior to retiring from the Deferred Pension Scheme. If the deferred pensioner married after beginning to receive a pension from the EPPF, the surviving spouse will not qualify to receive a pension upon the deferred pensioner's passing.

If there is no surviving spouse, but there is an eligible child, the child will receive a pension equal to 60% of the deferred pensioner's pension at the date of death. If there are two or more eligible children, the percentage will increase to 100%.

If there is no surviving spouse and there are no eligible children, the pension will cease at the date of the deferred pensioner's passing.

 

 Withdrawal benefits

Withdrawal due to voluntary resignation, abscondment or dismissal

In case of a withdrawal benefit due to resignation, abscondment or dismissal a cash benefit is payable. This is the prescribed minimum benefit in terms of the Pension Funds Second Amendment Act.

The benefit is the greater of:

First calculation: The capital value of the member's accumulated past contributions plus interest after December 2001. The interest rate must compare reasonably with the actual rate of investment return, net of fees and costs that the EPPF has earned on its assets;

Or

Second Calculation: Fair Value – the Fair Value pension is the amount of the pension that an in-service member has earned for past service up to the date of leaving the EPPF, based on the in-service member's pensionable salary at the date of leaving the EPPF. The capital value of the amount is calculated using financial assumptions, approved by the Registrar of Pension Funds.

Withdrawal due to retrenchment before age 50

In the event of a retrenchment of an in-service member, the benefit payable will be equal to the greater of:

-The benefit payable on withdrawal due to voluntary resignation, abscondment or dismissal;

Or

Third calculation - In the event of a negotiated cash settlement or retrenchment of a member, a benefit of three times the member's own annual contributions becomes payable. The EPPF must then pay to the member the greater of the first, second or third calculations.

Withdrawal due to retrenchment after age 50

If an in-service member has 10 years continuous service, he/she qualifies to receive a pension instead of a lump sum benefit, as approved by the employer. The employer will compensate the EPPF accordingly.

Deferred pension option

An in-service member may, instead of taking a cash benefit, become a deferred pensioner and may be granted a benefit equal to the actuarial value, as determined by the actuary, in respect of completed service. The deferred benefit reverts to the deferred benefit scheme and may only be accessed from age 55.