Michelle Acton, Retirement Reform Executive at Old Mutual

22 November 2023: The parliament’s finance committee has decided to maintain the original implementation date of the Two-Pot Retirement System of 1 March 2024. While we acknowledge the committee’s decision, we are disappointed that the proposed extension to 1 March 2025 was not approved.

Retirement Reform Executive at Old Mutual, Michelle Acton said she believes that a later implementation date would have provided the industry with more time to prepare for the significant changes involved in the Two-Pot Retirement System.

She expressed concern about Old Mutual meeting the 1 March deadline, emphasising that readiness hinges on the government finalising and gazetting the 2022 Draft Revenue Laws Amendment Bill and the required Pension Fund Amendments, which governs the Two-Pot Retirement System.

The government initially communicated 1 March 2024 as the implementation date. However, in the lead-up to this year’s Medium-Term Budget Policy Statement in October, the National Treasury signalled a potential postponement to March 2025.

“In 2022, we confirmed that we would be ready for the Two Pot Retirement System on the condition that the relevant legislation was finalised expeditiously. As we approach the end of 2023, the legislation remains unfinalized, hindering our ability to fully prepare for the system’s implementation.”

Acton stressed that the industry is also dependent on the South African Revenue Service (SARS) and Financial Services Conduct Authority (FSCA) being fully ready as well, which is challenging without the Bill being gazetted.

Acton stated “The industry relies on SARS to guide us on their requirements for processing early withdrawal claims. Without this critical information, we cannot complete the system modifications to handle these transactions.”

Aside from system readiness, and the need for retirement funds to amend their rules, the member education and awareness is critical to the success of this new system, and with so many moving parts not finalised this leaves us with a considerably shorter lead time, making it more challenging for us to be ready by 01 March 2024.

“We acknowledge the   government’s decision and remain committed to working closely with them to achieve the best possible outcome for all stakeholders, especially South Africans who depend on the timely availability of these funds. Our unwavering support for the Two-Pot Retirement System remains steadfast, and we are committed to delivering a robust and efficient system that benefits everyone,” Acton said.

ENDS