Re­tire­ment pro­pos­als:opos­als:

Finweek English Edition - - Cover Story -

Gov­ern­ment has once again back­tracked on the im­ple­men­ta­tion of amend­ments to the tax treat­ment of prov­i­dent funds, post­pon­ing it by an­other year to 1 March 2019.

Trade unions, no­tably Cosatu, have been openly op­posed to the pro­posed changes.

The lat­est pro­posed post­pone­ment was an­nounced in the re­cently pub­lished draft Tax­a­tion Laws Amend­ment Bill.

Trea­sury says in its ex­plana­tory mem­o­ran­dum on the bill the pro­vi­sions re­lat­ing to the an­nuiti­sa­tion re­quire­ments for prov­i­dent funds must be post­poned since dis­cus­sions on the com­pre­hen­sive pa­per on so­cial se­cu­rity are still un­der way in the Na­tional Eco­nomic De­vel­op­ment and Labour Coun­cil (Ned­lac).

In 2015 Trea­sury an­nounced the far-reach­ing re­tire­ment re­forms aimed at a sim­pler and more uni­form regime that will en­sure the preser­va­tion of a large por­tion of re­tire­ment sav­ings post-re­tire­ment.

In terms of the 2015 amend­ments, mem­bers of a prov­i­dent fund will no longer be able to with­draw all their re­tire­ment sav­ings in a sin­gle lump sum.

In 2016, the im­ple­men­ta­tion of the re­form was post­poned to 1 March 2018. Most of the other re­tire­ment re­forms have been im­ple­mented, ex­cept for the preser­va­tion re­quire­ments for prov­i­dent funds.

As with pen­sion funds, mem­bers of prov­i­dent funds will only be al­lowed to take a third of the re­tire­ment ben­e­fit as

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