Deirdre Phillips, Partner, Bowmans
After many in the retirement industry may have taken a deep sigh of relief when the National Treasury finally agreed to postpone the implementation date of the much debated two-pot retirement system to 1 March 2025, it appears that the industry may now be caught in a simmering pot of uncertainty –the pot is clearly still being stirred.
On 21 November 2023, Parliament’s Finance Committee advised against National Treasury and the retirement industry’s stance that an implementation date of 1 March 2025 is not feasible, and instead, is proposing to revert to the previously proposed implementation date of 1 March 2024.
The ‘pot stirring’ metaphor best explains the unpredictability of the legislative developments. The ‘two-pot legislation’ (i.e., the Revenue Laws Amendment Bill 39 of 2023 (Bill)), which was published earlier in this month, refers to an implementation date of 1 March 2025.
The Bill is still pending adoption by the National Assembly and thereafter the National Council of Provinces before it will be finally signed into law by the President.
A final decision on whether the Bill will be passed as is – that is, with an implementation date of 1 March 2025 – or whether the implementation date will be changed to 1 March 2024, must still be made.
In the meantime, and whilst the pot is still cooking, the retirement fund industry is waiting for the publication of the draft amendments to the Pension Funds Act, the Government Employees Pension Law and a few other statutes to give effect to the two-pot legislation.