SURVIVAL TIPS FOR RETRENCHMENT
Losing a job is a traumatic experience. But it is not always complete doom and gloom. Both Liberty Life and Hollard offer Retrenchment Packages as add-ons to their life policies. If you would like more information on this, please contact your broker, Vivian Alcock or Matthew Campbell. SOME EXTRA INFORMATION ON RETRENCHMENT SURVIVAL: Preserve your retirement savings Research shows that 95% of those who are retrenched or leave a job opt to take the cash from their pension funds instead of reinvesting it into a preservation plan. The impact of this is severe. If you spend the money instead of saving it, you have effectively reduced your retirement fund in direct proportion to the number of years you have been working in your previous job, leaving you underfunded for retirement. Always consult a financial adviser when you switch jobs. Build up an emergency fund One of the best ways to prepare yourself against the ill effects of retrenchment is to build up an emergency fund. You should have at least three, and preferably six months’ salary saved up. That way, if you are retrenched, you can rest assured that your expenses are covered and you can take your time to find a new job that is right for you. It may take a while to build up this cushion, but it is well worth the effort. Did you know? Under South African law, there must be a valid economic, technical or structural reason to initiate retrenchments. Companies have to inform employees that they are considering retrenchments and then give them a chance to motivate reasons why they believe they should not be retrenched. Possible alternatives to dismissal should also be investigated and considered. If a retrenchment is unavoidable, then the company has to pay the employee a severance package of at least one week's salary for every year they were employed by the company.