Africa-Press – South-Africa. The National Treasury has published proposed amendments to the legislation governing public sector pension funds, essential for launching the incoming two-pot retirement system.
From 1 September 2024, all amounts saved into a retirement fund will be split into a savings and a retirement component (pot).
One-third will automatically go into the savings account and be accessible before retirement.
The remaining two-thirds will only be accessible at retirement and will be used to buy an annuity-providing product.
A third vested component will hold most of the retirement savings until the two-pot system is launched and follows the current legislation.
The initial amount in the savings component will be 10% of the amount saved in the vested component, up to a maximum of R30,000.
To meet the upcoming deadline, which was moved several times by National Treasury and Parliamentary Standing Committee on Finance, the following public sector pension laws have been amended:
Government Employees Pension Law, 1996 (Proclamation 21 of 1996)
Post and Telecommunications-related Matters Act, 1958 (Act 44 of 1958)
Transnet Pension Fund Act, 1990 (Act 62 of 1990)
“The proposed amendments insert certain definitions to provide for the introduction of the savings withdrawal benefit; to provide for the appropriate account of a member’s interest in the savings, retirement, and vested components and to provide for deductions that the funds may make.”
“The amendments to the public sector pension laws will be proposed for inclusion in the Pension Funds Amendment Bill [B3—2024], which is currently under consideration of the Standing Committee on Finance.”
“Parliamentary hearings on the Pension Funds Amendment Bill will be held on 12 March 2024, including these public sector pension laws amendments,” said National Treasury.
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