The Association for Savings and Investment South Africa (Asisa) has welcomed National Treasury’s decision to move out, by a year, the date for implementing the two-pot retirement system but still believes the new deadline is problematic.
Cosatu, on the other hand, is concerned about the later date, saying overindebted workers desperately wanted to access their retirement savings.
On Tuesday, Treasury told the National Assembly’s Standing Committee on Finance (Scof) it accepted that the current implementation date of 1 March 2023 was not feasible, given the extensive changes that retirement funds and administrators would have to make. It has, therefore, decided to move the implementation date to March 2024.
Asisa senior policy adviser Rosemary Lightbody expressed the organisation’s appreciation for the later date. However, she told the committee: “It is clear that there is still a lot to be done and finalised, so the March 1, 2024 implementation date is still very ambitious – probably too ambitious.”
Lightbody reiterated that retirement funds and administrators could make the necessary administrative and IT changes only once the final legislation has been published.
She told Moonstone that Asisa would still like funds and administrators to be given at least 18 months from the date of the final legislation in which to make the necessary changes.
Asisa was also wanted sufficient time for funds to educate their members about the two-pot system. This could not be done until the legislation was 100% certain, because communicating information that could change would create confusion.
Lightbody said Asisa was “as anxious as Cosatu” to get the two-pot system up and running and was “not looking for excuses” not to implement it. However, the system had to be implemented properly, which would take time.
Treasury’s proposed revisions to the draft legislation may make meeting the 1 March 2024 deadline an even bigger ask. The finer details of Treasury’s “broad-brush” proposals have yet to be worked out and incorporated into a revised bill. Some of the changes will require consultation with industry stakeholders and the involvement of the FSCA, and the Pension Funds Act will have to be amended.
Read: Treasury agrees to three of Cosatu’s responses to the proposed two-pot system
Read: Other concessions by Treasury on potentially ambiguous two-pot provisions
Matthew Parks, Cosatu’s parliamentary co-ordinator, told the committee that overindebted workers have been anticipating the implementation of the two-pot system next year.
He said Cosatu appreciated the need for additional consultation over the proposed changes to the draft bill and asked Treasury to consider a compromise, with an implementation date of October 2023.
