Gordhan: We have policy certainty
22 February 2016
Posted by: Author: Ingé Lamprecht
Author: Ingé Lamprecht (Moneyweb)
Following postponement of compulsory annuitisation of new provident fund benefits.
Finance minister Pravin Gordhan has insisted that most of the retirement industry has "absolute certainty” about the direction of policy reforms.
This follows after cabinet postponed a regulatory requirement that was due to be introduced on March 1 this year and that would have compelled provident fund members younger than 55 to annuitise two thirds of their pension at retirement insofar as these benefits were accumulated after March 1 and exceeded an amount of R247 500. The requirement, which may still be amended during a consultation process, has been postponed to March 1 2018.
Currently provident fund members can take their whole benefit as a cash lump sum at retirement. Members of pension funds and retirement annuities are already required to annuitise and won’t be affected by the delay.
Cosatu has been vocal in its opposition to the regulations and warned that it may withdraw its support for the governing party in the upcoming municipal elections if its demands weren’t met. The fact that the paper on Social Security Reform has not been released has also been a point of contention.
Answering a question during a conference call on Thursday, Gordhan said Treasury has a very strong history of taking time to revise policy papers repeatedly, releasing it to industry and interested parties and getting input before going through the parliamentary process – something very few countries do.
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This article first appeared on moneyweb.co.za.