Provident Fund Claims and Liquidation | Learn How to Claim...

Learn how Provident Fund claims and liquidation work in South Africa, including the legal process, timelines, and member rights under the Pension Funds Act.

This guide explains what happens to your retirement savings during fund closure

How to claim benefits and what steps to take to ensure compliance and timely payout. Ideal for employees, HR professionals, and financial advisers navigating fund dissolution and member communication.

Retirement fund liquidation is a regulated process under the Pension Funds Act (Act 24 of 1956), overseen by the Financial Sector Conduct Authority (FSCA). It affects thousands of South Africans each year. Especially those employed by companies that shut down, restructure, or exit their retirement schemes.

Whether you're a member of a provident, pension, or umbrella fund, understanding your rights and responsibilities during liquidation is essential for protecting your long-term financial wellbeing.


What Is Provident Fund Liquidation?
Liquidation is the formal closure of a retirement fund. It does not mean the fund is bankrupt. Instead, it’s a structured process to:

• Distribute remaining assets fairly
• Terminate the fund’s legal and financial obligations
• Ensure compliance with national regulations

Common triggers include:

• Employer closure or withdrawal from the fund
• Trustee decision due to non-compliance
• Member-employer consensus that the fund is no longer viable


Step-by-Step: The Liquidation Timeline
The process typically spans 6 to 12 months, depending on fund complexity. Here’s a breakdown:

1. Appointment
FSCA appoints a liquidator
Estimated Duration: Two (2) months

2. Compilation
The liquidator draft benefit schedules and accounts
Estimated Duration: Six (6) months

3. Inspection
Members may inspect and object
Estimated Duration: Two (2) months

4. Benefit Payments
Approved benefits are paid
Estimated Duration: Two (2) months

5. Deregistration
The fund is officially closed
Estimated Duration: Six (6) months

If you want to learn more about this process, click here:

Sanlam Liquidation Full Exemption Guide
What Happens to Your Retirement Savings?

During liquidation:
• Contributions stop immediately
• You cannot access your savings until the process is complete
• Your benefit is calculated based on your fund value at the liquidation date

Once finalised, your benefit may be:
• Transferred to a preservation fund or retirement annuity
• Paid out in cash (subject to SARS tax)
• Reinvested in another approved retirement vehicle




What You Should Do
To ensure smooth processing:

• Update your contact and banking details with the fund administrator
• Respond promptly to any requests from the liquidator
• Consult a registered financial adviser before making decisions

If you're not certain who the fund administrator or underwriter is, you need to get the information prior to contacting them. For instance, if it is Sanlam, then you contact Sanlam. If it is Old Mutual, then you contact Old Mutual, etc.

Resources:
1.  Sanlam Fund Termination Benefits
2.  Liquidation Full Exemption
3.  When Liquidation of the provident fund becomes inevitable
4.  Pension Fund Act

You can contact CureDebt:
An NCR-accredited debt relief provider like CureDebt or reach out via WhatsApp at 067 035 2576 or phone our office at 012 943 1392.