Flood of inquiries about pension withdrawals
People seeking to withdraw money from their retirement nest-eggs are flooding staff at the island’s pension regulator with queries.
Yesterday, new rules opening access to a portion of pension pots came into effect to assist those struggling with the economic impact of the Covid-19 crisis.
Peter Sousa, the chief executive of the Pension Commission, said his team of five had dealt with queries from more than 100 people, and stood ready to answer many more.
Mr Sousa was keen to clarify the rules to ensure those in need of funds received them as efficiently as possible.
The new rules allow for either a one-time withdrawal of up to $12,000 from a private pension fund, or a withdrawal of 25 per cent of the balance of such a fund.
Applicants do not have to prove financial hardship in either case, Mr Sousa said, which makes the forms fairly straightforward to deal with.
The $12,000 option is open only to the those under the age of 65 and not already retired. This is a one-time withdrawal, and applications must be made to the applicant’s private pension plan administrators.
The deadline for applications is June 30, 2021.
“I appreciate that there are many people who will need the funds right now, but there may be others who may not be in immediate need,” Mr Sousa said.
“It’s important for them to know that they have more than a year to apply for the $12,000 option.”
There is no time limit on the 25 per cent withdrawal, for which applicants must be 65 or over, retired and no longer working, and have not converted their pension account balance into an annuity.
For this option, applications should be made to the Pension Commission.
“We can send the forms by e-mail, but some people have told us they don’t have access to e-mail,” Mr Sousa said.
“In those cases, we look to send the form to a friend or family member who does have e-mail.”
The Pension Commission has been working closely with pension administrators such as Argus, BF&M, Colonial and Freisenbruch-Meyer to ensure that their forms are consistent with the requirements of the law.
“We recognise that the administrators are going to receive potentially thousands of applications, and lots of them at the same time,” Mr Sousa said.
“So it’s very important that applicants take care to fill out the forms correctly and include all the necessary documentation, as that will help everyone to receive funds more efficiently.
“But people will make mistakes, that’s human nature. Pension administrators have set up special teams to deal with this.”
The rules allow for 20 days between an application being approved and funds being sent out.
Mr Sousa said administrators had to sell invested assets to raise the funds, which could not always be done immediately. For example, some funds allow redemptions only once a week, or month.
Some people have pension money with more than one administrator.
The rules do not allow for multiple withdrawals of $12,000 each from different fund manager, Mr Sousa stressed.
Administrators were communicating with each other to insure that the rules were followed, he added.
• For more information, contact the Pension Commission at 295-8672, or by e-mail at email@example.com
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