Fin24 reports that Treasury last week announced new legislative proposals that would see the two-pot retirement system take effect at the start of March 2024.
The two-pot system means employees would be able to access one-third of their retirement savings throughout their career, while two-thirds would only become accessible on retirement. At the start of March 2024, members of retirement and provident funds, as well as retirement annuities, would be able to withdraw a once-off R25,000 or 10% (whichever is lesser) of their existing savings. But senior stakeholders strongly questioned the timeframe, saying it would not be possible for the industry to re-engineer all their retirement product systems effectively in just eight months. New rules, policy terms and conditions must be developed for each fund by all the companies, and these rules must be accepted by trustees and pension fund boards. After that, the terms and rules of every fund must be approved by the Financial Sector Conduct Authority. New processes will then have to be created for every product, which will require immense IT development. Allan Gray director Richard Carter advised that the asset management and pension fund industry had previously submitted that they would need at least 12 to 18 months from when the legislation was finalised to implement everything. Alexforbes, SA's biggest pension fund administrator, agreed that the 1 March 2024 deadline was going to be a "very tight" and was definitely going to put pressure on administrators.
- Read the full original of the report in the above regard by Nick Wilson at Fin24 (subscriber access only)
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