Employers who have been preparing for and educating themselves on the new retirement fund legislation taking effect 01 March 2015 can slow done and delay their preparation for another year. National Treasury announced on Thursday, 16 October 2014, the that implementation of the retirement reform has been delayed for at least another year.
In a media statement released (available on http://www.treasury.gov.za/legislation/bills/2014/TLAB-TALAB/) it is stated that Government has allowed additional time for further consultations at NEDLAC. If an agreement is not ready by the end of June 2015, it is highly likely that the date of implementation will be pushed out another year until 01 March 2017.
This decision seems to be welcomed by not only employers but also fund administrators who have been put under immense pressure to adjust systems and procedures to accommodate the changes that will ensure equal tax treatment of all the different retirement fund options.
The postponed implementation date means that for the coming tax year, from 01 March 2015, pension, provident and retirement annuity funds will operate as is and the contributions and deductions will be taxed as they are today. Company contributions towards a retirement fund will not result in a taxable fringe benefit, provident fund contributions will not be allowed as tax deductions and pension and retirement annuity contributions will be tax deductible, subject to their individual statutory limitations.