Retirement Reform delay

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.

4 Comments

Filed under General, HR, Industry Information, Legislative Updates

4 responses to “Retirement Reform delay

  1. vusie

    Hi My name Is Vusie

    I am commenting on this statement “f 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.”

    I feel there is something hidden here, What does it mean ” if an agreement is not reached by June 2015, so my question is that What if and agreement is reached then by June 2015, so what does it mean, Does this mean that they will then implement it right there as they have reached an agreement?

    Because the postponement is only subject to NEDLAC not reaching agreement – then it will be postponed to march 2017.

    please help with clarity, i am confused here.

    • Madelein van der Watt

      Hi Vusie

      Various parties have objected to the implementation of the retirement reform legislation in its current form. The Treasury Department has therefore allowed more time to consider the concerns and suggestions of everyone who will be affected by the new legislation. Even if a final decision is made before 1 March 2016, there has to be sufficient time for employers, fund administrators, SARS and taxpayers to prepare and implement the final outcome. I think this is why the deadline of June 2015 was agreed upon, to allow for sufficient planning and preparation once a final decision has been made. If a decision cannot be reached by June 2015, then the effective date of the new legislation must be extended for at least another year to accommodate everyone involved.

      Regards

      Madelein

  2. kobus pieterse

    Hi madelein,my name is kobus. Re to the above i want to know where will the extra money come from for the pension of security gaurds as their wages is so low,i mean the police wages is more than double than security.they always get a small increase each year its time for a increase not less than 25 persent by 2015

  3. NDAMULELO MUFAMADI

    im expecting to get my money as am nolonger under bagaining cuncil

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