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See Why Government Backs Down On Retirement Savings

The government has once again caved in to trade union pressure by agreeing to a two-year delay in the introduction of the compulsory annuitisation of two thirds of provident fund savings on retirement. A Business Day report notes this is the second time that the Treasury has unsuccessfully tried to implement the provision and then backtracked in the face of strong opposition from Cosatu. The proposed postponement was tabled by Finance Minister Pravin Gordhan at an urgent meeting on Monday with the social partners of Nedlac. Delegations from the Association for Savings and Investment SA – which is strongly opposed to any postponement – and Business Unity SA were also present. Gordhan is expected to announce details of the postponement in his Budget vote speech next Wednesday. A postponement of the implementation date will require that an amendment to the Taxation Laws Amendment Act – which contains the provision – be rushed through Parliament. The Treasury has acknowledged in its talks with business and labour that employers and employees need certainty as to what will prevail after 1 March as systems will have to be changed, which may be ‘very costly’.

source: legalbrief


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