pension fund

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Want to access your pension fund? There’s some bad news…

Earlier this year, National Treasury released draft reforms which would allow South Africans to have easy access to their retirement savings

pension fund

Image via: Adobe Stock

If you’re one of the cash-strapped South Africans who were hoping to access a portion of their retirement savings next year, you may have to wait a little bit longer. The National Treasury has extended the implementation date for the Retirement Fund Two Pot system withdrawal to March 2024.

Earlier this year, Treasury released draft reforms which would allow South Africans to have easily accessible savings while also ringfencing funds meant for retirement, all in a bid to help those who are heavily indebted.

The new regulation was expected to come into effect next year. As per the Revenue Laws Amendment Bill, pension funds would be structured in a two-pot system.  One pot amounting to a third of the pension fund, would be a savings pot that workers could access once a year when in financial need. The other two thirds would be placed in a preservation pot for workers to access upon retirement.

NO ACCESSING YOUR RETIREMENT SAVINGS JUST YET

The decision was taken to extent the date to 2024, due to the fact that certain policy issues need to be addressed before the bill can come into effect. This bill applies to all retirement funds including Retirement Annuities.

In August The Sunday Times reported that the Government Employees Pension Fund (GEPF) was growing concerned about facing a serious cash crunch due to large-scale resignations.

“This is due to pension funds basing the investment strategy on a long-term view of the pension obligations. Given the GEPF volumes, a high number of resignations would carry a risk of liquidity pressures in the short term,” the GEPF is quoted as having said.

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