Members of the Association for Savings and Investment South Africa (ASISA) are doing “everything in their power” to ensure their systems and processes will be ready to implement the “two-pot” retirement system on 1 September, but members are anxious because they are having to do this without the final legislation.
This was said by Adri Messerschmidt, a senior policy adviser at ASISA, at a meeting of the National Council of Provinces’ Select Committee on Finance on Tuesday. The committee met to process the Pension Funds Amendment Bill (PFAB).
The PFAB and the Revenue Laws Amendment Bill (RLAB) need to be promulgated before the system can be implemented. The RLAB is awaiting President Cyril Ramaphosa’s signature.
One of the committee’s members, Dennis Ryder of the Democratic Alliance, took Old Mutual, an ASISA member, to task for comments by its chief executive, Iain Williamson, that the 1 September implementation date “may slip” because of insufficient time.
Ryder said concerns about the implementation date should have been brought to the committee.
“The erosion of Parliament is on many people’s lips […] but if you’re not prepared to engage Parliament, then what do you expect?” he said.
“The level of input that we’ve had has been […] quite on a fairly superficial level without going into depth, so to Mr Williamson and his cohort, if you really want to make a lot of noise, come and make it where it’s going to make a difference because talking to the media is not going to have an impact on the implementation date.”
Ryder said National Treasury stated that Parliament decided the implementation date, “so if you want to influence that political decision, don’t talk to Treasury; come and talk to the politicians”.
Messerschmidt said she was not privy to the context in which Williamson had made his remarks. However, she knew that Old Mutual, along with all ASISA’s members, is working very hard at implementation.
There’s a general anxiety among ASISA members to implement a fundamental change to the retirement fund system within a very short space of time, “and the anxiety is that we don’t have final legislation”, she said.
Every business is “working on the faith that the legislation will be passed as soon as possible so that they can make these changes to their systems legally. At this stage, there’s no final legislation on which they’re working. Our members are working on the legislation as it is known now. They can’t afford to wait for it to be final, so there is a general concern about the timing, and I suspect that’s where the comments probably came from.”
Messerschmidt said ASISA’s members have started with communication campaigns to explain the two-pot system to fund members. They have also trained their financial advisers so they can advise members on the implications of the system.
ASISA has engaged with the FSCA on its readiness to process the rule amendments as soon as the Pension Funds Act is changed. “They have assured us that they will increase their resources to be able to process fund rule amendments before the implementation date.”
ASISA has also engaged with the South African Revenue Service about the tax directives for inter-fund transfers.
Messerschmidt provided the committee with a brief overview of the substantial and complex administrative changes that will have to be in place by 31 August.
She emphasised that ASISA’s members are committed to meeting the 1 September implementation date, despite not having the final legislation.
The Select Committed adopted its report on the PFAB on 19 April.
