The South African retirement industry is gearing up for a major overhaul as the implementation of the two-pot retirement system looms closer. In a recent webinar hosted by Batseta, it was made clear just how complex the transition will be for administrators, trustees, and advisers of pension funds, and how much preparation is still needed.
Old Mutual Corporate senior consultant Nobuhle Mfeka expressed relief at the six-month delay in the system’s implementation, which was accepted by the National Assembly’s Standing Committee on Finance. The new implementation date is set for 1 September 2024, after Finance Minister Enoch Godongwana’s proposal was approved.
Godongwana cited numerous concerns that would hinder a smooth implementation by the initial date of 1 March 2024. He highlighted the need for institutions like Sars, FSCA, GEPF, and GPAA to have their internal systems ready by the new deadline.
Mfeka emphasized the significant changes the two-pot retirement system will bring, including the split of contributions into a savings component and a retirement component. She outlined the preparations needed for administrators to handle the new dynamics of the system effectively.
Members are encouraged to consult with their financial advisers and be educated on the changes, especially regarding the savings component and its tax implications. The industry is bracing for increased administrative complexity and rising costs in the short term.
Overall, stakeholders are urged to prepare diligently for the upcoming changes and work towards a successful implementation of the new retirement system on 1 September 2024.