Author: BDlive. The Government Employees Pension Fund (GEPF) has assured its members and pensioners that the new Taxation Laws Amendment Act will not affect their pensions or benefits. The fund is SA’s largest pension fund and investor, with about 1.2-million members and more than R1-trillion in assets under management. It pointed out on Monday that as a defined benefit pension fund‚ the benefits of the fund were already taken as a one-third lump sum gratuity and the remaining two-thirds were taken as a pension.
Category: Retirement
The ins and outs of retirement reform
Author: Michelle Acton. A Q&A for provident fund and pension fund members As the reforms related to tax harmonisation of retirement funds is set to become a reality on1 March – or T-day, as it has become known – it is vital members are communicated with in order to avoid hasty, and potentially damaging actions. There has been much uncertainty from members as to how they will be impacted. The below Q&A aims to assist provident fund and pension fund members understand the latest amendments and to what extent they are impacted by the changes.
Zuma moves to calm waters over provident funds
Author: Ingé Lamprecht (Moneyweb). President Jacob Zuma has moved to calm the waters after the Congress of South African Trade Unions (Cosatu) demanded that the new regulations that will compel provident fund members to annuitise be scrapped. Zuma signed the Tax Administration Laws Amendment Act and the Taxation Laws Amendment Act into law earlier this month. The regulations, which will harmonise the taxation of contributions to pension funds, retirement annuities and provident funds, will take effect on March 1.
Gordhan moves to calm workers over new pension laws
Author: Jenni Evans (Fin24). Controversial new pension laws only apply to money saved from 1 April this year, Finance Minister Pravin Gordhan said on Thursday. “Anything you saved up to March this year is not touched. The old rules still apply,” Gordhan said at a post-Cabinet briefing broadcast from Pretoria. Panic and anger set in among workers when President Jacob Zuma signed the new tax laws such as the 2015 Tax Laws Amendment Act and the Tax Administration Laws Amendment Act into force.
SARS explains 2015 Tax Administration Amendments
Author: Lorys Charalambous (Tax-News.com) On December 17, the South African Revenue Service (SARS) issued an explanatory memorandum on the 2015 Tax Administration Laws Amendment Bill (TALAB). In particular, the memorandum looks at the TALAB provisions giving effect to the collection of information from South African financial institutions (FIs), and the associated obligation on the FIs to register with SARS regarding the Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA) with the United States that was signed in July last year.
Changes that are Likely to Impact your Payroll
The much-anticipated legislation to give effect to the tax harmonisation reforms of retirement funds has finally been signed into law by the President. The changes will be implemented with effect from 1 March 2016, as was anticipated prior the official publication of the legislation in the Government Gazette on 8 January 2016. Below is a short summary highlighting certain aspects of the changes:
Think carefully before transferring your Retirement Annuities
Author: Lisa Griffith, an Associate Director at BDO Wealth Advisers. Paying penalties when you choose to transfer your retirement annuities has been a thorny issue for investors in RA’s for some time. The lure of a unit trust based retirement annuity, or concerns about mediocre performance, may prompt investors into switching to a new generation product. However, this process will not always result in the investor being in an improved position and so it may ultimately not be prudent to transfer after all.
Treasury forges ahead with retirement reform – Tax harmonisation of retirement funds to be implemented March 1, 2016
Author: Ingé Lamprecht (Moneyweb). Tax harmonisation of retirement funds to be implemented March 1, 2016. JOHANNESBURG – National Treasury has confirmed that regulations to harmonise the taxation of contributions to pension funds, retirement annuities and provident funds will take effect on March 1 next year. This means that provident fund members will only be able to take one third of their pension benefit as a cash lump sum at retirement and that the remaining two thirds will have to be annuitised. However, this will only apply to contributions made after March 1, 2016 and for those below 55 years of age. Moreover, members will only be required to annuitise once their retirement savings exceed an increased amount of R247 500. The previously proposed threshold was R150 000.
Tax changes for retirement funds to be implemented from 2016
The tax harmonisation reforms for retirement funds will be implemented from 1 March 2016‚ the Treasury says. “This is in terms of the current law legislated in 2013‚ and amended in 2014 by shifting the effective date to 1 March 2016 (ie the Taxation Laws Amendment Act‚ No 39 of 2013‚ as amended by Act No 43 of 2014). The 2015 Taxation Laws Amendment Bill did not amend the scheduled implementation date‚ “but only amends the R150‚000 de minimis threshold to R247‚500; closes certain coverage gaps; and requires a review of the legislation after two years from the effective date‚ and to report this review to Parliament”‚ the Treasury said.
Three things you should know about retirement reform
Author: Ingé Lamprecht (Moneyweb). Unpacking annuitisation, the increased deduction and the implications for high net worth individuals. Regulations to harmonise the tax treatment of retirement fund contributions are set to be introduced from March 1 next year, but questions remain about whether the reforms will really encourage household savings and improve the plight of vulnerable individuals. This article looks at three of the changes and their broader ramifications.