Today's Labour News

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retirementMoneyweb reports that pension funds and their administrators are racing against time to implement highly complex changes to their rules before pension fund reforms come into effect on 1 September this year.

Originally, the reforms were planned for implementation in March 2025. A major concern is the lack of final legislation which means some 3,000 retirement funds will have to amend their rules without knowing whether there will again be changes once the final bill is passed. “There is still a lot of uncertainty and there is only about six months within which all the processes must be set in place. We need the legislation to be tabled to parliament, voted on and passed so that it can be published and made into law. We need that really soon,” Joon Chong of Webber Wentzel indicated. There are three components to the new system. At implementation, the value of a member’s retirement savings will be fixed. That is the vested component and the current rules remain applicable to that portion. The savings component (savings pot) will have “seeding capital” that will be automatically transferred to the savings pot. This is 10% of the vested pot up to R30,000. Going forward, one-third of the contribution will be allocated to the savings pot and two-thirds to the retirement component (retirement pot). The SA Revenue Service (Sars) will have to be ready to issue millions of directives once the system is in place since pension funds will not know what the individual’s marginal rate will be if there are different streams of income.

  • Read the full original of the informative report in the above regard by Amanda Visser at Moneyweb


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