Moneyweb reports that changes to the tax treatment of provident funds, introduced as part of broader retirement reforms in 2015 by National Treasury, have once again been postponed for further consultation.  

In terms of the proposed reforms, provident funds would be treated the same as pension and retirement annuity funds requiring the annuitisation of benefits.  This has been met with resistance, specifically from trade unions.  The change would mean that on retirement members of provident funds would only be permitted to take up to a third of the retirement benefit as a lump sum and the remaining benefits should be preserved.  But this would only be for contributions made after the implementation date.  The initial date for implementation was March 2016, which was postponed to March 2018 and will now most probably only be March 2019.  The unions want to firstly understand how annuitisation will fit into the entire social security reform package, but discussions on this at Nedlac are still at a very early stage.

• Read this report by Amanda Visser in full at Moneyweb

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