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Fin24 reports that according to retirement fund administrators, "critical" administrative moves – including President Cyril Ramaphosa signing the Pension Funds Amendment Bill (PFAB), and the resolution of tax issues – need to be resolved before the looming two-pot deadline.
The system, which will be introduced in September this year, was officially established when Ramaphosa signed the Revenue Laws Amendment Bill into law this month. However, with the PFAB yet to be enacted by Ramaphosa, administrators say they cannot amend existing pension or retirement fund rules for the new system. The PFAB was officially passed with amendments by Parliament's National Assembly in May. "This piece of legislation is critical for implementing the two-pot system because, without it, retirement funds cannot amend their rules to cater for the system. The rules set out how a fund will administer the fund benefits and how members will access their fund benefits," Adri Messerschmidt of the Association for Savings and Investment SA (Asisa) pointed out. Changes for the two-pot system include the splitting of monthly retirement fund contributions into a "savings" and "retirement" component. Meanwhile, all retirement savings will be held within the "vested" component as part of the retirement component. Messerschmidt said administrators must also apply to the Financial Sector Conduct Authority (FSCA) before the fund amendments could be authorised. Moreover, the SA Revenue Service (SARS) has yet to finalise its tax directives for administrators. Messerschmidt reported: "SARS continues to engage with stakeholders, including retirement fund administrators, on their requirements for obtaining tax directives to have a savings withdrawal benefit paid out. SARS has stated that the public will be informed in due course of the requirements for tax directives for savings withdrawal benefits."
- Read the full original of the report in the above regard by Na'ilah Ebrahim at Fin24
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