The following is a news flash published by the PAGSA on October 31, 2023 regarding the Two-pot Retirement System Postponement.

POSTPONEMENT OF THE EFFECTIVE DATE OF THE TWO-POT RETIREMENT SYSTEM

The Standing Committee on Finance has confirmed the proposal to change the Two-pot Retirement System draft legislation to:
1. Postpone the effective date from 1 March 2024 to 1 March 2025
2. Increase the seed capital amount to the lesser of ten per cent of the “vested component” and R30 000.

While the official documentation lists these as ‘proposed’ changes, there seems to be no doubt that the final Revenue Laws Amendment Bill that will be introduced shortly in the National Assembly for approval will reflect these proposed changes. However, keep in mind that at the time of writing this newsflash, the final legislation has not yet been issued, and that parliament must give their approval before there is certainty.

The postponement to the effective date was made at the request of the retirement fund industry to give them more time to make the necessary changes to their systems, to train their staff, and to educate the members of the funds.

The increase to the seed capital amount was requested by various labour organisations to reduce the current hardship of many members of the retirement funds.

There are other changes to the Two-pot retirement system that are likely to be introduced in the coming year.

Note that the postponement of the effective date to 1 March 2025 means that as matters stand, the SARS Vision 2024 Monthly tax certificate project and the Two-pot Retirement System will both ‘go live’ on 1 March 2025.