Fin24 reports that according to the Association of Savings and Investment SA (Asisa), pension fund administrators are facing a "monumental task" to ensure changes to pension funds can be made before the ‘two-pot’ system is implemented later this year.
The new system will allow retirement fund members to make partial withdrawals from their retirement funds before retirement, while preserving a portion that can only be accessed at retirement. With Parliament seeking to finalise legislation before the 1 September implementation date and workers anxiously waiting to withdraw from their retirement savings, Asisa’s Adri Messerschmidt said there was little time left to finalise implementation of systems changes and business processes. Pension fund administrators have been forced to work alongside draft rules to prepare for the new retirement system. Both the Pension Funds Amendment Bill (PFAB), which allows for the necessary changes in pension fund rules, and the Revenue Laws Amendment Bill (RLAB), which introduces the two-pot system, need to be promulgated before implementation of the system. However, neither has become law yet. With the RLAB currently awaiting President Cyril Ramaphosa's signature, Parliament's select committee on finance hosted virtual public hearings on the PFAB on Tuesday. Messerschmidt told the committee: “There is a general anxiety among our members about implementing a fundamental change within a short space of time. The problem is that we do not have final legislation to do this.” Old Mutual previously said that the legislative limbo and a lack of clarity on the tax treatment for withdrawals could hamper the rollout of the initiative by the deadline.
- Read the full original of the report in the above regard by Na'ilah Ebrahim at Fin24
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