Mzansi workers, zaka's coming your way

THE two-pot retirement system has officially been signed into law.

From 1 September, workers who have retirement funds can now access their funds to a maximum of R30 000 per year whenever they need the money.

This after President Cyril Ramaphosa signed into law the Pension Funds Amendment Bill on Sunday, 21 July. The bill gives retirement fund members access to retirement savings without having to resign or cash out their full pension funds.

Ramaphosa granted the Pension Funds Amendment Bill, which amends pension-related legislation to enable the implementation of the recently legislated two-pot retirement system, geared towards bolstering retirement savings.

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.

According to Presidency spokesman Vincent Magwenya, the law introduces 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.

He said that 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.

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"This law complements the Revenues Laws Amendment Act, 2024 (Act No. 12 of 2024), which was signed by the president on 11 June 2024.

"Government has proposed a reform to the retirement saving regime, which will see the introduction of the ‘two-pot' retirement system. From the proposed date of 1 September, one-third of retirement contributions will be split into a savings component and two-thirds into a retirement component," said Magwenya.

He explained that the savings component will be available for withdrawal at any time before retirement and the ability to unconditionally access amounts from the "savings component" will be provided without the member having to stop employment or having to resign.

He further explained that a member will be allowed to make a single withdrawal within a year of assessment, with a minimum withdrawal amount of R2 000.

"The ability to withdraw from the savings component will be applicable on a per fund or per contract basis. Withdrawals from the savings component will be added to the individual's taxable income and will be taxed at their marginal tax rates," he said.