National Treasury: Updated FAQs Two-Pot Retirement system

National Treasury: Updated FAQs Two-Pot Retirement system

• 13 August 2024
• Regulatory Compliance and Legislation
• South African Accounting Academy

The original FAQ document was issued in July 2024, and has now been updated in August 2024.

It now contains 18 FAQs (where the original document only contained 9 FAQs) and is still aimed at providing information on the basics of the Two-Pot Retirement system that is effective from 1 September 2024.

1. What is the “two-pot” system of retirement?
2. Who is it meant for?
3. Why the two-pot system?
4. How will it work?
5. How will the amount allocated to the vested component grow with interest?
6. Will there be immediate access (seed capital)?
7. Will members receive their withdrawals immediately on 1 September?
8. Is the 10% or R30 000 going to apply annually?
9. Will the fund member lose the money if a withdrawal is not made?
10. Is there a maximum withdrawal amount or limit?
11. What is the withdrawal claiming process?
12. What happens when a member resigns from employment?
13. What happens in the event of a divorce?
14. Will the savings component earn interest?
15. What is the effect on Provident fund members 55 year or older on 1 March 2021?
16. Where will the seeding come from for provident fund members less than 55 years old in 2021?
17. What is next in the process?
18. What should you do?

Click here to download the Updated 6-page FAQ document:

https://www.treasury.gov.za/comm_media/press/2024/2024%20Two-pot%20System%20Updated%20%20FAQ%20August%202024.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The new Pension Funds Amendment Act is yet another piece of legislation that your clients (who are pension funds) must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• As an auditor, independent reviewer and accountant, you need to consider your client’s compliance with the new Pension Funds Amendment Act, and be aware of guidance published by National Treasury.
• As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for practitioners to keep abreast of any changes in so that they can continue to advise their clients accordingly.

Relevance to Your Clients:

• Pension fund members who wish to apply to access portions of their pension funds from 1 September 2024, should be aware of guidance published by National Treasury.
• As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for individuals and pension funds to be aware of the latest changes that may affect them, e.g. the new two-pot retirement system.

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