How much flexibility you will have to invest your retirement funds where you wish when these are due to you depends on the rules of your fund.
But the pension funds ombudsman, John Murphy, has indicated that he will not tolerate the paternalistic attitude of large funds where it is not warranted.
Murphy, in his latest ruling, has given a retired member of the Nasionale Pers' pension fund the green light to place his R1,5 million pension wherever he wishes.
This follows a dispute between Petrus Muller, a staff member on an Afrikaans weekly newspaper, and his pension fund, in which the trustees tried to limit his choice.
Muller took the issue to Murphy saying that the decision of the trustees was an improper exercise of their powers.
The trustees amended a rule giving them the discretion to transfer the capital value of the pension to a registered life assurer to buy alternate pensions.
Later the trustees decided that pensioners could transfer out of the Nasionale Pers fund to specific funds with Sanlam or Old Mutual only.
Muller requested he be given the opportunity to invest his capitalised pension with Momentum Life.
He pointed out that he would be able to obtain a better benefit more suited to his needs if he were permitted to invest in the open market, within acceptable limits.
Murphy says the complaint raises fundamental issues on the extent to which pensioners should be permitted individual choices in their pension options.
In a defined benefit arrangement, where the fund bears the liability and risk towards the pensioners, it is right and fair that the investment decision belongs to the fund.
With the move from defined benefit to defined contribution funds, the transfer of investment risk from employer to the member justifies a lower measure of responsibility and a diminished paternalistic authority.
The true objectives of the trustees are those of administrative convenience and the obtaining of favourable rates from assurers with whom the fund has an ongoing close relationship, says Murphy.
He overruled the trustees' decision.