Treasury satisfied with public participation in proposed Two-Pot retirement system

National Treasury has expressed satisfaction with the level of public participation in the proposed Two-Pot retirement system.

It says it has received a total of 291 submissions from members of the public commenting on the system.

Treasury says the comments are mainly from the public sector, labour unions and retirement funds.

It also says 29 of the 291 comments are from organisations and the remainder from individuals.

The system will start in March next year.

This system will see pension funds separated into two.

One third of the pension savings pot will be accessible to workers during their working lives, while the other two-thirds pot pension savings won’t be accessible until retirement age.

This new measure is to aid individuals to access funds during difficult financial times without having to resort to resigning to access their pension fund.

At the same time, this system will better ensure that workers save the bulk of their retirement savings for the longer term.

National Treasury has proposed that pension fund members be able to tap on to a maximum allowance of R25 000 a year, but labour unions are calling for more.

Pension contributors will be taxed on their withdrawals.

In the video below, Director of the Tax and Financial Sector Policy Division at the National Treasury, Alvinah Thela, explains the system in detail: 

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