After wide consultation, National Treasury and SARS have made some changes and clarifications to the original proposals on introducing a “two pot” retirement system.
On 29 July 2022, the 2022 Draft Revenue Laws Amendment Bill was released for public comment, setting out proposals for implementing a new “two pot” retirement fund system to provide more flexibility for members. The public comments period closed on 29 August, with National Treasury (Treasury) receiving written comments from 27 organisations and 80 individuals. There have also been workshops and discussions with the Standing Committee on Finance about these proposals.
Broadly, the plan in the draft bill is to create two “pots” for retirement fund members. From the date the new system comes into effect, members will be able to make one taxable withdrawal a year from their “savings pot” (one-third of contributions), but the “retirement pot” (the other two-thirds) has to be preserved until retirement and used to purchase an annuity. There is a third pot, the vested amount in the fund at implementation date.
Taking public comments into account, Treasury proposes to clarify and amend the draft bill on broader policy issues as follows:
Post shared courtesy of: Webber Wentzel
by Joon Chong
18 October 2022
www.webberwentzel.com
