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