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Two-pot: New Pension Funds Amendment Act
- 23 July 2024
- Regulatory Compliance and Legislation
- South African Accounting Academy
The new Pension Funds Amendment Act enables the implementation of the long-awaited retirement reforms - i.e. the two-pot system.
The new Pension Funds Amendment Act amends the Pension Funds Act of 1956, the Post and Telecommunications-Related Matters Act of 1958, the Transnet Pension Fund Act of 1990 and the Government Employees Pension Law of 1996.
This law complements the Revenues Laws Amendment Act, 2024 (Act No. 12 of 2024), which was signed by the President on 11 June 2024.
The law provides for the introduction of the savings withdrawal benefit; the appropriate account of a member’s interest in the savings; retirement and vested components, and the deductions that may be made.
The Act requires pension funds to amend their rules, adjust their investment portfolios and prepare administrative systems for pension fund members to apply to access portions of their pension funds from 1 September 2024.
The retirement industry is expecting a flood of claims from South Africans eager to access a portion of their retirement savings when the two-pot system comes into effect.
Once the legislation has been gazetted, the Financial Sector Conduct Authority (FSCA) can formally register the various rule amendments of retirement funds.
Click here to access the press release:
https://www.thepresidency.gov.za/president-ramaphosa-signs-pension-funds-amendment-bill-law
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.
- 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:
- The Act requires pension funds to amend their rules, adjust their investment portfolios and prepare administrative systems for pension fund members to apply to access portions of their pension funds from 1 September 2024.
- 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.