Retrenchment and your money
Retrenchment carries specific legal entitlements, and the decisions made in the weeks afterwards — particularly about a retirement fund payout — have consequences that last decades.
Severance pay is a statutory minimum based on completed years of service, in addition to notice pay and payment for accrued leave. Your employer must also follow a fair procedure, and the CCMA hears disputes about whether it did.
Claim UIF immediately, using the UI-19 form from your employer. The time limit is the reason this comes first.
The pension or provident fund decision is the consequential one. Cashing out is taxed and permanently removes the compounding those years would have produced. Preserving it in a preservation fund or transferring it to a new employer’s fund keeps it working.
Check the credit life insurance on every loan you hold. Retrenchment cover, where it exists, pays instalments for a defined period and is among the most under-claimed benefits in South African credit.
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Page last checked 10 August 2026. Statutory caps and lender terms change — confirm anything you intend to rely on with the provider or the National Credit Regulator. Found something wrong? Tell us and we will correct it.