2-pot system is ready to roll

With just two months left before the two-pot retirement system is implemented on 1 September, pension fund members are asking if all parties involved are ready.

- Ina Opperman

It involves pension funds changing their rules, making new calculations and the president signing the Pension Funds Amendment Bill into law.

The president has already signed the Revenue Laws Amendment Bill that establishes the twopot retirement system, but he still has to sign the Pension Funds Amendment Bill. This is nothing to worry about, Michelle Acton, retirement reform executive at Old Mutual, said: "We expect the Bill will be signed into law before 1 September." With so many pension fund members interested in the twopot retirement system, it is likely that there will be a high number of withdrawals after 1 September.

Acton said the primary reason for wanting to withdraw seemed to be to settle debt.

The Financial Sector Conduct Authority (FSCA) has launched a Know Your Rights campaign aimed at educating members and trustees of pension funds about their rights and responsibilities.

As part of this campaign, the FSCA pointed out that it identified over 4 178 South African employers who are behind in making retirement fund contributions towards employee retirement funds, which ultimately forms part of the employee remuneration package. This means these employers are withholding what is owed to employees and are in violation of Section 13A of the Pension Funds Act that regulates the payment of retirement fund contributions.