From CompliNEWS | Financial Service Intelligence Watch
According to a speech made by Justice and Correctional Services Minister Ronald Lamola at the International Pension and Employee Benefits Lawyers Association conference in Cape Town, the ‘two pot’ retirement system will come into force on 1 April 2024, enabling South Africans to:
- save for non-retirement purposes, and
- preserve more of their savings for retirement.
Proposing the introduction of a two-pot system, the draft Revenue Laws Amendment Bill released in July 2022 for public comment has not yet been tabled in Parliament.
‘South Africa has been faced with the reality that people are not saving enough and that their retirement savings may not be enough to sustain their livelihoods during retirement.
In 2020 one of our reputable South Africa annual savings equal to about 15% of GDP and in the present fiscal year a deficit equal to 15% of GDP. On 29th July 2022 government released 2022 Draft Revenue Laws Amendment Bill.
The Bill contains key amendments on retirement reform to move towards a “two-pot” retirement system. The amendments enable South Africans to also save for non-retirement purposes, whilst preserving more of their savings for retirement.
These amendments aim to encourage members to preserve their retirement savings by making it more flexible to accommodate unforeseen pressures that members face during the span of their working life. It makes it possible for workers not to resign from their employment merely to access their retirement funds. The implementation date of the Two-Pot Retirement System is 1 April 2024.’