Members of Retirement Funds will be forced to wait a little longer before they can access a portion of their pension funds. The National Treasury has extended the implementation date for the Retirement Fund Two Pot system withdrawal to the beginning of March 2024.
The decision was taken after the realization that certain policy issues still need to be considered before the bill comes into effect.
According to the new bill, members of retirement funds will be able to withdraw one third of their pension fund whereas two thirds will be accessible only during retirement. This bill applies to all retirement funds including Retirement Annuities.
A savings element has also been introduced to allow members to withdraw a maximum of R2 000 once a year.
It’s estimated that members will be able to withdraw about 10 percent of their pension money, subject to a maximum of R25 000.
“There was a lot of unhappiness especially from labour that people are struggling and they need some of their money,” says John Anderson from Alexforbes.
The bill will help prevent those who cash in their pension funds every time they change jobs from doing so. And it will also give people who are retrenched limited access to their retirement funds as well as a savings portion.
“The big concession is immediate access for all your money accumulated up to March 2024 and the ability to take some of that to transfer to your savings account,” Anderson explains.
The bill will give pension fund members who are over 55 years old the option to continue to contribute to their vested pot or participate in the new regime.
VIDEO: The Two-Pot retirement system and its implications: Stefan Fouche