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09.05.2021

New provident fund regulations take effect 1 March

The Taxation Laws Amendment Act is now in effect in South Africa. RisCura’s Fran Troskie talks about two key takeaway points for trustees and provident fund members – communication and education  — on the new laws and how they are applied. Here are some of her tips;

  • Traditional differences between pension and provident funds are being removed in a bid by National Treasury to harmonise the retirement fund system.
  • The new laws aim to encourage a culture of saving so retirement fund members can retire comfortably
  • The new laws allow retirement fund members to invest up to 27.5% of taxable income.
  • Members are required by law to use two-thirds of their provident fund to purchase a retirement product.
  • These changes are not being applied retrospectively.
  • Trustees and employee benefits administrators need to have transparent, efficient and effective processes in place to value members’ assets and ringfence portions that are to be paid out as lumpsums and portions that have to be set aside for a retirement product.

Author

  • RisCura is a global financial services firm with more than $200 billion in assets under advice and reporting. We partner with institutional investors across emerging markets, bringing specialist investment management, advisory, and analytical expertise to help clients make informed, long-term investment decisions.

    Guided by our “Invest with Care” philosophy, we recognise that investment decisions are not only about money and numbers, but about the people and futures they affect. Through tailored solutions, deep research, and a client-centric approach, RisCura helps investors navigate complexity, manage risk, and create lasting value for their beneficiaries.

    RisCura is known for its focus on liability-driven investing, responsible investment practices, investment transparency, reliable valuations, independent risk assessments, performance standards, and long-term investment outcomes.

    Our capabilities span investment advisory, investment management, investment analytics, institutional platform services, and alternative investment services. Across these areas, we combine consistent methodology and proprietary tools with deep local insight, recognising that each market is unique while responsible investing remains universal.
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