There is a legal grey area over the calculation of pension interest in divorce settlements and whether funds may now be permitted to make deductions for future maintenance orders.
After years of stalled progress, the FSCA’s recent comments suggest National Treasury may renew its push for auto-enrolment.
The ‘imminent’ COFI Bill will introduce the licensing of retirement funds (including public sector funds), stricter board member standards, and enhanced oversight of contributing employers.
The MTBPS shows tax revenue will be below the Budget estimates, but SARS is adamant it will do everything in its power to collect as much money as it can.
Financial advisers warn that even small withdrawals can significantly erode retirement income over time.
Among other things, the revised Amendment Bill will clarify how funds should calculate seeding when provident fund members choose to join the system.
In September, Sanlam received more than 83 000 withdrawal claims, with most coming from members aged 35 to 44, many of whom had a replacement ratio below 50%.
SARS has processed more than 1.2 million tax directives for savings component withdrawals, paying out R21.4 billion to fund members.
Muvhango Lukhaimane will also consult with trustees on guidelines for naming and shaming problematic funds, administrators, and employers.
The system is driving a shift in how members engage with their retirement funds. Members are monitoring their savings and reacting to market fluctuations, says Old Mutual.
Funds made different calls on the conditions for the exclusion of provident preservation fund members and the seeding date for members who opt in.
Despite relatively low overall withdrawal rates, 24% of claimants are using their retirement savings for home or car repairs and 21% for settling short-term debt.
Financial advisers should understand the broader implications on tax planning, retirement savings, and investment strategies to guide their clients effectively.
The tax structure aims to be progressive, with low-income earners paying little to no tax on withdrawals, while high earners are taxed more.
More than 60% of two-pot withdrawal applicants have come from low-income groups, according to Momentum’s latest figures.
The Authority is seeking information on how much it costs retirement funds and administrators to adapt their systems for the new two-pot structure.
The introduction of the two-pot retirement system has triggered a wave of withdrawal applications, prompting concerns over tax liabilities and the need for improved financial education.
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