South Africans Question Government Signing Pension Funds Amendment Bill Into Law: “More Control?”
- President Cyril Ramaphosa has signed the Pension Funds Amendment Bill Act into law, effective 1 September 2024
- Under the new Act, pension fund members can apply for a withdrawal from their pension fund once yearly
- Using a two-pot system, contributions will be split into one-third savings and two-thirds retirement components
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JOHANNESBURG — The Pension Funds Amendment Bill has been passed into law after receiving the National Assembly's approval.
The bill amends various pension-related Acts under South African law from 1956 to 1996, geared towards bolstering retirement savings.
Pension Funds Amendment Bill passed
The Presidency said in a statement that the law accommodated the introduction of the savings withdrawal benefit, among other things.
However, it said the Act required pension fund managers to amend their rules and adjust their investment portfolios.
"Pension funds [must] prepare administrative systems for members who apply to access portions of their pensionable earnings [effective] 1 September 2024.
"The Pension Funds Amendment Bill complements the Revenue Laws Amendment Bill, signed on 11 June 2024," said the Presidency.
According to the government, the 2024 Draft Revenue Laws Amendment Bill clarified the existing language.
It also aims to simplify the directives system for administrators and the South African Revenue Service (SARS) so that they can efficiently implement the "two-pot" retirement reform.
"The government presented an amendment to the retirement saving regime to introduce the two-pot system. This will see retirement contributions split into one-third savings and two-thirds retirement components," said the Presidency.
"Savings funds can be withdrawn at any time, once a year, before retirement, with the [flexibility] ensuring the member need not resign or cash out their entire pension fund.
"The minimum withdrawal amount is R2000. The ability to withdraw will be applicable on a per-fund or per-contract basis. [Additionally], [all and any] withdrawals will be added to the individual's taxable income."
South Africans have a say
Outspoken locals took to social media to express their views on the development, with many criticising the government for passing the bill into law.
While some questioned its feasibility, others noted that the government, coupled with the revenue service, stood to benefit the most from it, not ordinary citizens.
Briefly News looks at the reactions.
@StarstruckGifts wrote:
"More government control over pensions? Just what we need. Let people manage their own money without interference!"
@Edupac50 said:
"The government introduced this to cover itself from a failing economy, hoping to keep people happy for a little longer. Long term, it will fail."
@SebinTdr aired:
"Noooooooo. There is no access for workers. @TreasuryRSA is the one [which is] going to coin it big time. This is just plain useless."
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Source: Briefly News
