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Financial Services and Retirement Reform


  • Tax preferred savings and investment accounts will be introduced in 2015.
  • Retirement funds will be required to identify appropriate preservation funds for exiting members, who will be encouraged to preserve when changing jobs.
  • Retirement funds will be required to guide their members through the process of converting savings into a regular income after retirement, and to choose or establish default annuity products that meet appropriate principles and standards. More competition will be promoted by allowing providers other than life officers to sell living annuities.
  • The tax treatment of pension, provident and retirement annuity funds will be simplified and harmonised.
  • Governance reforms of retirement funds will also be implemented, with measures in place to ensure trustees of retirement funds are trained once they have been appointed. The Minister intends to call up a conference of all trustees this year to take this process forward.


From T-day (2015), employer contributions to retirement funds will become a fringe benefit in the hands of employees for tax purposes. Individuals will be able to receive an annual deduction on employer and employee contributions to a pension, provident or retirement annuity fund up to 27.5% of the greater of remuneration and taxable income (excluding retirement annuity or lump sum income). A ceiling of R350 000 will apply.


Government intends to introduce tax-preferred savings and investment accounts by 2015. All returns accrued within these accounts and any withdrawals would be exempt from tax. There will be initial annual contribution limit of R30 000 and a lifetime limit of R500 000, to be increased regularly with inflation.

Above provided by the Financial Planning Institute

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