Pension fund members were taken aback by the amount of tax they had to pay when they accessed their retirement savings under the two-pot system, calling it unfair because the SA Revenue Service (Sars) took it all while they get poorer.
They could access the savings pot of their retirement savings under the two-pot system since it was implemented in September last year.
Various funds and fund managers, as well as Sars, warned pension fund members in advance that they will pay tax on their withdrawals.
Sars also warned in August that people who intend to withdraw from the savings pot of the two-pot system must be registered for tax.
If you are not registered for tax, Sars rejects the request for a tax directive from your pension fund.
Before a final amount is paid out, Sars informs the pension fund to also deduct any outstanding debt on behalf of Sars.
If you have a debt arrangement with Sars, the withdrawal will not be affected. If you do owe Sars money for tax, it is deducted and paid over to Sars.
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