Provident Fund Annuitisation Legislation

National Treasury has confirmed that the 2016 Revenue Laws Amendment Act, promulgated on 20 May 2016, qualifies provident fund members for a tax deduction on their own contributions ‘without being required to annuitise for the next two years’.

According to an accompanying media statement, the release of a paper on comprehensive social security is expected to facilitate discussions aimed at bringing finality to the process of ‘completely’ aligning tax and annuitisation treatment across all retirement funds.

It was stymied by ‘considerable confusion and misinformation’ among members of the public and trade unions about provisions in the relevant legislation requiring a retired provident fund member to purchase an annuity with two-thirds of his/her ‘retirement assets’.

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