South Africa’s big retirement overhaul delayed

South African lawmakers agreed to postpone by at least six months plans to allow savers early access to part of their pensions.

A parliamentary finance committee last month agreed to introduce a so-called two-pot pension system from March 1, even after the National Treasury and the retirement industry sought to delay its implementation.

The new arrangement will enable individuals to contribute one-third of their savings into an account that can be accessible at any time, while two-thirds must only become available at retirement.

Finance Minister Enoch Godongwana asked lawmakers to delay the introduction of the new system to Sept. 1 to allow for necessary systems to be put in place, according to a letter from the minister read in parliament on Monday.

“To enable withdraws from the savings component at the date of implementation, funds must apply for the correct tax rate for the withholding tax,” Godongwana said in the letter.

“This would be done through a directive from the South African Revenue Service. SARS has indicated that they need at least six months after promulgation of legislation to put such a system in place.”