The Government Employees Pension Fund (GEPF) decreased the pensions of some of its members at the end of September due to a revised rate of tax implemented by the SA Revenue Service (Sars).
This followed a directive from Sars that provided for a revised rate of tax to be deducted from pensioners’ monthly pension payments.
“The impact on the tax paid by pensioners is as a result of changes to the revised tax rate (PAYE) as notified by Sars. It is important to note that this only applies to pensioners who receive more than one source of taxable income in addition to their GEPF pension, that is the income sources as reflected on the Sars tax system,” the GEPF said in a statement.
“The GEPF reiterates that pensioners have the option to opt out of the revised tax rate provided by Sars and revert to the normal PAYE rate applicable to their pension.
“It is important to note that this choice will result in the GEPF continuing to deduct tax as in previous months and not in the more accurate effective tax rate as provided by Sars. This may result in pensioners having to settle a tax debt with Sars at the end of the tax year. Choice forms will be sent to affected pensioners and will also be available at GEPF offices.”
Not all pensioners were alerted to the reduction with Tshwane-based retired national archivist Graham Dominy being shocked by the unannounced 10% reduction in his monthly pension at the end of September.
The GEPF said in its statement that “prior to implementing the revised rate of tax, the Government Pensions Administration Agency (GPAA) wrote to all affected pensioners using the contact details that GPAA has, informing them of the choices they have. Some pensioners might have not received the correspondence or did not fully understand the choices/options they had.”
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