Two-pot withdrawals: taxpayers who understate their income face penalties
SARS has processed more than 1.2 million tax directives for savings component withdrawals, paying out R21.4 billion to fund members.
#preretirementwithdrawals
Beware the tax impact on withdrawals from your savings ‘pot’
Avoiding the tax hit is one of the reasons retirement fund members should have an emergency fund.
FSCA publishes ‘two pots’ guidance for defined-benefit funds
If a fund cannot follow the standard allocation methods, it must apply for FSCA approval to use an alternative, reasonable method.
Proposed conditions for legacy RAs to be exempted from two-pot system
Among other things, funds will have to show that participating in the two-pot system will negatively impact members’ benefits.
How the process to make withdrawals from the savings ‘pot’ will work
Retirement fund members must ensure their fund has their correct details and they are registered as a taxpayer with SARS.
FSCA alerts funds of consequences if two-pot rule amendments aren’t submitted by 31 July
Funds that cannot pay withdrawals because their rules are invalid must inform members why they may not be allowed to access their benefits.
10 things people often get wrong about the two-pot retirement system
Old Mutual’s learnings about what people know or expect, based on its interactions with customers and advisers.
Pre-retirement savings withdrawals ‘make sense in certain cases’
Preservation must be encouraged, but the reality is that a retirement fund is many South Africans’ only source of savings, says Alexforbes.
Dispelling misconceptions about the two-pot retirement system
Members particularly need to understand pre-retirement withdrawals, and the implications of these withdrawals, including tax and liquidity at retirement.
