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DISABILITY: ONE WAY TO ACCESS FUNDS BEFORE 55

Board of trustees will have to rule on whether the money can be paid out.

in this case isn’t necessarily the same as that for an insurance claim.

Marina Higginson at GFP Financial Planning explains: “As there is no risk product attached and therefore no underwriting, the definition of permanently disabled is fairly loose.

“What is required is for the member to make an application to the board of trustees, provide medical evidence and the board will then decide whether or not to approve it.”

Boards of trustees will generally rely heavily on the medical opinion with the application. Each fund may handle this slightly differently, but there are broad similarities.

Allan Gray’s Shaun Duddy explains that members of the Allan Gray RA need their attending medical practitioner to provide details in three areas.

“First, they must provide a reasonable level of detail on the condition(s) that the member is suffering from.

“Next, they must state what, in their professional view, are the chances of that member recovering from that condition.

“Last, given the combination of the condition that they face and the likelihood of recovery, do they believe that the person is, in the traditional definition, permanently disabled either physically or from a cognitive point of view.”

This is then evaluated by the board of trustees.

Medical opinion

“The ultimate decision on whether or not the member is deemed permanently disabled sits with the trustees of the relevant fund,” says Duddy.

“That decision is, however, heavily influenced by the professional opinion of the medical practitioner.”

Higginson says there may be instances where the board can’t make a decision based on the initial submission alone. The board can ask for further medical evidence and call in an expert to help them with the assessment.

Insurance policies will generally differentiate between being disabled for your own occupation, a similar occupation or any occupation. These categories don’t apply here.

“We’re defining disability in general terms of being disabled, not relative to a particular occupation, or any occupation,” Duddy says. “You could have situations where your retirement fund is willing to accept early retirement based on disability, even though you don’t qualify under your insurance policy.”

The threshold for what’s considered permanent disability may not be the same as that for an insurance claim.