{"id":67727,"date":"2024-06-04T07:02:49","date_gmt":"2024-06-04T07:02:49","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks"},"modified":"2024-06-04T08:43:03","modified_gmt":"2024-06-04T08:43:03","slug":"new-retirement-system-for-south-africa-hits-roadblocks","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks","title":{"rendered":"New retirement system for South Africa hits roadblocks"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>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 retirement system becomes effective.<\/p>\n

There are at least four roadblocks for the new system. Specifically:<\/p>\n

The signing of the Pension Fund Amendment Bill needs to take place<\/p>\n

The Revenue Second Amendment Bill needs to be finalised<\/p>\n

SARS needs to finalise system requirements<\/p>\n

The seeding calculations for the new system can only take place after August<\/p>\n

The signing of the Revenue Laws Amendment Bill will allow for the implementation of the Two-Pot system on 1 September 2024.<\/p>\n

The new system will allow individuals to access up to one-third of their retirement savings before retirement via a \u201cSavings Pot.\u201d The remaining two-thirds will be placed in a \u201cRetirement Pot\u201d that will only be accessible upon retirement.<\/p>\n

\u201cThere are significant long-term benefits of this new system, which will bolster financial well-being and provide more flexibility,\u201d said Blessing Utete, Managing Executive of Old Mutual Corporate Consultants.<\/p>\n

That said, the success of the system rests on preparation and targeted member education.<\/p>\n

\u201cOne 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\u2019t mean funds may be able to pay out on that date as there are several steps that need to be implemented first,\u201d said Utete.<\/p>\n

\u201cThis is primarily because the allocations to the Savings Pot can only happen from 1 September onwards\u201d.<\/p>\n

Under the new system, members will see the lower of either 10% of the value of their retirement fund or R30,000 as of 31 August 2024 allocated to their Savings Pot from 1 September.<\/p>\n

From then on, two-thirds of any new savings will be dedicated to retirement and cannot be accessed until then.<\/p>\n

Members of Provident and Provident Preservation Funds who were 55 or older as of 1 March 2021 in that same fund will decide to opt into the new system or stay in the current system.<\/p>\n

In addition, Michell Action, Old Mutual\u2019s Retirement Reform Executive, said that the payouts from the emergency pot will not be made immediately.<\/p>\n

\u201cSeeding calculations can only be conducted after the end of August, using the values from that month,\u201d said Action.<\/p>\n

\u201cThe 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.\u201d<\/p>\n

Admin still to do<\/p>\n

The funds also need to do a great deal of work before they are ready for the new legislation.<\/p>\n

The seeding calculation, for instance, determines the initial amounts that will be allocated to the different pots and will depend on the individual savings of each member.<\/p>\n

Depending on the rules of each retirement fund, the process could still take several working days to weeks.<\/p>\n

\u201cThe Two-Pot system is designed to be an emergency savings vehicle, giving you that initial boost to help build your emergency savings,\u201d said Acton.<\/p>\n

\u201cHowever, if you deplete it on day one, it ceases to serve as emergency savings.\u201d<\/p>\n

In addition, the signing of the Pension Fund Amendment Bill and the finalisation of the Revenue Second Amendment Bill are crucial before the legislation is in place for implementation.<\/p>\n

SARS also needs to finalise system requirements, as no Savings Pot payments can be made without an easy tax deduction directive process.<\/p>\n

Members will also need to have their tax affairs in order before applying for a Savings Pot withdrawal. SARS may deduct any other outstanding tax before payment is made.<\/p>\n

Members will need a tax number to apply for a Savings Pot withdrawal.<\/p>\n

\u201cWe need to significantly ramp up employee financial literacy initiatives around retirement reforms and overall financial well-being to facilitate a successful integration of the system,\u201d said Utete.<\/p>\n

\u201cMembers will also need to take the time to understand this new system and the importance of saving for retirement.\u201d<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. 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 retirement system becomes effective. There are at least four roadblocks for the new system. Specifically: The signing of the Pension Fund Amendment Bill needs […]<\/p>\n","protected":false},"author":84,"featured_media":67726,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-67727","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nNew retirement system for South Africa hits roadblocks - South Africa<\/title>\n<meta name=\"description\" content=\"President Cyril Ramaphosa may have signed the Revenue Laws Amendment Bill, but other pieces of legislation and systems s ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New retirement system for South Africa hits roadblocks\" \/>\n<meta property=\"og:description\" content=\"President Cyril Ramaphosa may have signed the Revenue Laws Amendment Bill, but other pieces of legislation and systems s ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-06-04T07:02:49+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-06-04T08:43:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/06\/sm_1717477735.209161.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"New retirement system for South Africa hits roadblocks\",\"datePublished\":\"2024-06-04T07:02:49+00:00\",\"dateModified\":\"2024-06-04T08:43:03+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks\"},\"wordCount\":667,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/06\/sm_1717477735.209161.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/new-retirement-system-for-south-africa-hits-roadblocks\",\"name\":\"New retirement system for South Africa hits roadblocks - 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