Ramaphosa signs new retirement system for South Africa into law

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President Cyril Ramaphosa has signed into law the Revenue Laws Amendment Bill of 2023, which establishes a “two-pot” system that gives members of retirement funds access to retirement savings without having to resign or cash out entire pension funds.

The amendment law introduces a “two-pot” retirement system to address the concerns related to lack of preservation before retirement and lack of access to retirement funds by households in financial distress.

The reform introduced by the legislation strives to strike a balance between long-term security and immediate needs, recognising life’s unpredictability. “One of the most important points to communicate to members is when their money will be accessible. Even though the legislation goes live on 1 September, it doesn’t mean funds may be able to pay out on that date as there are several steps that need to be implemented first” the group said.

Michelle Acton, Retirement Reform Executive, explained that payouts from this emergency pot cannot be made immediately.

 

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