Concerns over proposed two-pot retirement system
SA will be the first country to pilot the two-pot retirement system, reports The Citizen. But when exactly this will happen is a mystery to everyone outside of government.
According to Dumo Mbethe, CEO of Momentum Corporate, even asset-management and insurance companies were as much in the dark as the man on the street on the legislation that will outline when and how the new system will be rolled out.
‘The two-pot retirement system was mentioned during the Budget Speech last month, but this was very brief and there was not much indication into how or when the legislation around it would be implemented,’ Mbethe said.
During his national budget announcement, Minister of Finance Enoch Godongwana said: ‘After further consultations, government intends to publish revised draft legislation on the ‘two-pot’ retirement system.
‘This will include details on the amount that could be immediately available when the system is implemented from 1 March 2024. Any withdrawals from the accessible ‘savings pot’ would be taxed as income in the year of withdrawal.’
Mbethe said that as such, they have not made any major progress in preparing for it.
But he says that Momentum does predict that there will likely be an influx of persons wanting to make a withdrawal given the struggles people are facing in the current economic climate.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.