‘Fund members should also note that administration costs and tax at marginal rates will be deducted from such withdrawals. Members will lose out on all related future growth and the retirement benefit originally intended for those funds,’ National Treasury said on Tuesday.
The warning follows the presidential signing of the Pension Funds Amendment Act into law, marking the final step in introducing the two-pot system.
‘At the same time the reform allows some measured access in cases of financial distress without a member having to resign from employment,’ the National Treasury said. Retirement funds and trustees are currently updating their rules to match the new laws. Once ready, they will inform their fund members about the changes and provide details on the withdrawal process.
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