IN THE SPOTLIGHT: RETIREMENT SAVINGS REFORM

IN THE SPOTLIGHT: RETIREMENT SAVINGS REFORM

• 30 November 2023
• In the Spotlight
• SA Legal Academy

The implementation date for two-pot retirement saving system proposals in the Revenue Laws Amendment Bill may be brought forward to 1 March 2024. However, that is not a foregone conclusion; the parliamentary process is still under way.

During a 21 November 2024 meeting of the National Assembly’s Standing Committee on Finance, members across the political spectrum expressed grave concern about the dire consequences for cash-strapped South Africans of delaying implementation to 1 March 2025 – as the tabled Bill provides. However, according to National Treasury representatives at the meeting, neither the industry nor the South African Revenue Service is ready for earlier implementation. Apparently, the associated risks could undermine confidence in the entire system.

The Revenue Laws Amendment Bill is a section 77 piece of legislation popularly referred to as a ‘money Bill’, which may not be changed by any committee without following certain parliamentary procedures. The Finance Minister should be notified in writing and allowed 14 days to respond to what is proposed. However, while the Minister may choose to use that opportunity to dissuade the committee from proceeding as intended, its decision to do so regardless may not be overruled.

At the time of writing, the Standing Committee on Finance had yet to receive a response from the Minister. Only when members have considered the Minister’s comments may they vote to adopt a report reflecting that process and the implementation date agreed.

Public consultations on retirement savings reform began in May 2012 with the release of a discussion paper elaborating on proposals announced in the 2012 Budget. The ensuing 11-year process is documented below.

Since August 2021, the proposed two-pot retirement savings system’s implementation date has moved from 2022 ‘at the earliest’ to 1 March 2023 (as proposed in a draft Bill released in July 2022 for public comment) to 1 March 2024 (as announced by Finance Minister Enoch Godongwana in his February 2023 Budget speech) to 1 March 2025 (as reflected in the Bill tabled in Parliament with the Medium Term Budget Policy Statement).

• May 2012: National Treasury releases discussion document for comment
• September 2012: National Treasury releases technical discussion paper for comment
• February 2013: National Treasury issues document on retirement savings reform proposals
• September 2020: DA MP Dion George gazettes Pension Funds Amendment Bill explanatory summary, calling for comments (prompted by widespread Covid-19-pandemic-related financial distress)
• October 2020: Medium Term Budget Policy Statement announces upcoming retirement savings reform legislation
• November 2020: DA MP Dion George tables Pension Funds Amendment Bill
• March 2021: DA issues media statement including key points of Pension Funds Amendment Bill
• August 2021: National Treasury issues media statement on retirement savings reform ‘approach and planned timelines’
• May 2021: parliamentary hearings on DA’s Pension Funds Amendment Bill [Parliamentary Monitoring Group (PMG)]
• August 2021: National Treasury Deputy Director General: Tax & Financial Sector Policy, Ismail Momoniat advises National Assembly Standing Committee on Finance to postpone discussions on DA Pension Funds Amendment Bill pending finalisation of two-pot retirement savings system proposals to be announced in upcoming Medium Term Budget Policy Statement (PMG)
• November 2021: Medium Term Budget Policy Statement announces two-pot retirement savings system proposals
• December 2021: National Assembly Standing Committee on Finance tables report declaring DA Bill ‘undesirable’
• December 2021: National Treasury issues detailed media statement on two-pot retirement savings reform proposals
• July 2022: National Treasury issues media statement providing more information on proposed two-pot retirement savings system
• July 2022: National Treasury issues media statement on all draft tax Bills released for public comment, including draft 2022 Revenue Laws Amendment Bill
• draft 2022 Revenue Laws Amendment Bill
• February 2023: Budget speech announces imminent release of revised draft Revenue Laws Amendment Bill for public comment
• June 2023: National Treasury issues media statement calling for input on three draft Bills, including revised draft Revenue Laws Amendment Bill
• revised draft Bill
• explanatory memorandum
• August 2023: National Treasury briefs National Assembly Standing Committee on Finance on all draft Bills, including revised draft Revenue Laws Amendment Bill
• September 2023: submissions sought in anticipation of parliamentary hearings on draft tax Bills and revised draft Revenue Laws Amendment Bill (PMG)  
• October 2023: National Treasury responds to stakeholder input during hearings
• November 2023: revised Revenue Laws Amendment Bill tabled, with Medium Term Budget Policy Statement and related tax Bills

Published by SA Legal Academy Policy Watch

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