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BusinessTech writes that President Cyril Ramaphosa may have signed the Revenue Laws Amendment Bill, but other pieces of legislation and systems still need to be signed and created before the ‘two-pot’ etirement system becomes effective.
There are at least four hurdles for the new system to take place, namely, the Pension Fund Amendment Bill needs to be signed; the Revenue Second Amendment Bill needs to be finalised; SARS needs to finalise system requirements; and the seeding calculations for the new system can only take place after August. The new system is intended to be implemented on 1 September 2024. It will allow individuals to access up to one-third of their retirement savings before retirement via a “savings pot.” The remaining two-thirds will be placed in a “retirement pot” that will only be accessible upon retirement. Blessing Utete of Old Mutual Corporate Consultants commented: One of the most important points to communicate to members is when their money will be accessible. Even though the legislation goes live on 1 September, it doesn’t mean funds may be able to pay out on that date as there are several steps that need to be implemented first.” Michell Action, Old Mutual’s Retirement Reform Executive, agreed that the payouts from the savings pot would not be made immediately. He explained: “Seeding calculations can only be conducted after the end of August, using the values from that month. The legislation allows for seeding calculations soon after implementation, not necessarily on that date. As a result, actual access for members will likely take place after 1 September.” The seeding calculation will determine the initial amounts that will be allocated to the different pots and will depend on the individual savings of each member.
- Read the full original of the report in the above regard by Luke Fraser at BusinessTech
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