GNAT Provident Fund Exit Form and Options Available(Tier 3 Pension Scheme)
Occupational Tier 3 Pension Schemes, or GNAT Provident Funds, are pension schemes set
up under the Pension Act 2008, Act 766, which allow employees and/or employers
to voluntarily contribute up to 16.5% of employees’ income tax free. Contributions
into a Provident Fund are made before any tax is assessed on income, which can
lead to significant tax savings for employees.
In order to keep the tax relief, contributions and associated gains must be kept in
the Provident Fund for at least ten years. With the exception of a withdrawal to secure a mortgage for the purchase of a primary residence, any redemption of the
benefit before the ten-year limit will a+ract tax at the income tax rate.
The law offers options that allow employees to keep their Provident Fund tax savings even a-er the employee leaves the service of their employer.
Option 1: Maintain Your Benefit With Your Current Trustee
An exiting employee may maintain his or her contributions with their current trustee by electing to join a Personal Pension Scheme provided by that trustee.
This election should be communicated to the trustee as soon as possible a-er exiting
the company. Members of Petra Opportunity Pension Scheme may instruct Petra to
move their contributions into a Personal Pension Scheme upon exiting service with
their enrolled employer. The Personal Pension Scheme is managed with the same
diligence as the employer scheme. The exiting employee can continue to make additional tax-free contributions into the Personal Pension Scheme until the individual
elects to redeem.
Option 2: Transfer Funds Completely to a New Trustee
When an employee selects this option, the old trustee will transfer all the employee’s accrued benefit to the new trustee selected by the employee. The new Tier 3
scheme can be a Personal Pension Scheme or the Provident Fund associated with
the employee’s new employer. The law allows a maximum of 90 days for a trustee
to complete the process of transferring funds from one scheme to another. This option has no tax implications as contributions remain in a Tier 3 scheme.
The statements expressed herein are informed opinion, speak only to the stated period, and are subject to change at any time based on market or
other conditions. This publication is intended merely to highlight issues and not to be comprehensive or to provide advice.
For further information or advice, please contact Petra Trust or visit our website.
Exit Options Available to Provident Fund
(Tier 3) Contributors
Website:
www.petratrust.com
Phone: +233 (302) 763
908 / +233 (302) 740
963/4
E-mail:
customerservice@
petratrust.com
Street Address: F304/5 |
Dade Close | North
Labone