NEWS
The President has approved the Taxation Laws Amendment Bill, 2015
which was passed by both Houses of Parliament at the end of last year.
The wait is over for retirement fund members, who will enjoy increased tax deductions from their contributions to retirement funds. This includes provident funds, for which members were not previously able to claim a deduction. The tax deduction of up to 27.5% of the greater of taxable income or employment income, subject to an annual ceiling of R350 000, will come into effect.
Another change is that employer contributions to occupational pension and provident funds will be included in the gross income of employees as a fringe benefit. This means that employees will be able to treat these contributions as their own when calculating their tax deductions. These deductions are subject to the limits mentioned above.
You will have to buy an income-providing product…
Retirement funds will also be aligned, ironing out some of the differences between the different products. One of the key changes is around ‘annuitisation’ – the process of converting retirement savings into a stream of future income. From 1 March, provident fund members, like retirement annuity and pension fund members, will only be allowed to take one-third of their retirement savings as cash and they will have to use the rest of their nest egg to buy a product that pays them an income during retirement.Treasury has stressed that vested rights will be protected – i.e. the new rules will not apply to historic savings or to growth on those contributions.
…unless you are about to turn 55…
If a provident fund member is 55 or older on 1 March, the new requirement will not apply. Any accumulated retirement savings as at 1 March, as well as new contributions and growth after 1 March, can still be taken as a cash lump sum at retirement.…or you have saved under R247 500
Members with a retirement benefit at retirement less than or equal to R247 500 will be allowed to withdraw the entire amount without the need to purchase an annuity, as of March. This is an increase on the current value of R75 000.TESTIMONIALS
Dear NFS team
I would like to like to commend you for your excellent work in assisting consumers across KZN through your involvement in the radio show
Khanya KZN on Gagasi FM. The level of professionalism and excellent knowledge of financial matters has made me and many other Gagasi
FM listeners understand the importance of having people like you (Financial Advisors) in our lives. The response from the listeners every
time you engage with them has been phenomenal. The best advice I would give to consumers would be “ensure you have a financial advisor
guiding you on how best to keep your money safe and make it grow for your future needs” I must say I have learnt a great deal from NFS as
a consumer myself, from finance, investments and planning for my future. So keep up the good work!!!
Kind Regards
Zilungile Makhanya
Journalist/Presenter Consumer Show Gagasi Radio
