This news aggregator site highlights South African labour news from a wide range of internet and print sources. Each posting has a synopsis of the source article, together with a link or reference to the original. Postings cover the range of labour related matters from industrial relations to generalist human resources.
Fin24 reports that amid some confusion about how two-pot pension payouts will be taxed, Treasury has provided clarity.
The new two-pot system means employees will be able to cash out one-third of their future retirement savings throughout their career, while two-thirds will only become accessible on retirement. The one-third component is called the "savings pot", while the other two-thirds is the "retirement pot". When the new proposed legislation was made public earlier this month, there was some concern as an example in the explanatory memorandum was inconsistent with the wording included in the draft bill, making it appear as if all the money in the one-third savings pot would be taxed as normal income on retirement. Currently, the first R550,000 of all lump-sum payouts on retirement is tax free, and the balance of the lump sum is taxed at lower tax rates. On Wednesday, Treasury confirmed that withdrawals from the savings pot upon retirement will also still be subject to lump sum rates – and won't be taxed at the much higher normal income rates that will apply to early withdrawals. "This is good news as it confirms that the status quo with regards to tax incentives supporting preservation of the full retirement pot (retirement component and savings component) remains in place after implementation of the two-pot system," commented Pieter Koekemoer of Coronation Fund Managers.
- Read the full original of the report in the above regard compiled by Helena Wasserman at Fin24
Get other news reports at the SA Labour News home page