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Pension funds are protected from panic
RETIREMENT FUNDS
SO YOUR employer has gone under and on top of the problems of finding a new job, there is the added worry of what's happened to your money in the company's pension or provident fund. Firstly, don't panic. The assets of your retirement fund are separate from those of the company. If the company closes down, the fund's assets can't be used to pay company debts. If the company is liquidated, the retirement fund is not automatically liquidated - although this often happens. The next issue is when you will receive the money if the fund is liquidated? According to Alan McCulloch of Liberty Life's marketing retirement funds division, there is a lengthy procedure to be followed in terms of the Pension Funds Act. It is quite likely there could be a delay of up to six months, which causes much angst to fund members. But such procedures were introduced to ensure liquidations were finalised in a proper and effective manner, and that every member's interest is protected. As soon as a fund goes into liquidation:
Once these procedures have been complied with, the registrar will give the go-ahead for the liquidation to be finalised. McCulloch says there is little that can be done to speed up the process from a regulatory perspective. All fund members can do is ensure the liquidator has all the administrative details at the earliest time. If you do find yourself in this unfortunate situation, here's what you should find out:
The liquidator cannot finalise the accounts unless every member has supplied the following information:
Network and stay in contact with the other members of the fund, so that anyone who may not have provided this information does so as soon as possible.
Remember that if a company goes into liquidation, your life and disability cover will terminate, so you need to make other arrangements.
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