Lerato Mbhiza
The National Assembly has approved the Pension Funds Amendment Bill without encountering any objections.
The Bill aims to amend the 1956 Pension Funds Act to introduce a savings withdrawal benefit. Together with the already passed Revenue Laws Amendment Bill, it will establish the so-called two-pot system.
Under this system, members of pension and retirement funds will be able to access one-third of their retirement funds from their savings pot.
The Pension Funds Amendment Bill will, from September, require that funds be divided into three components or “pots” split between savings, retirement and a vested portion. It will also allow members to transfer or withdraw savings in the event they change or lose their job. Fund members can choose if they want to opt into the new system.
“In times of dire financial distress, members of pension or provident funds tend to terminate their employment in order to access
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