The proposal to amend the Pension Fund Act came after Tito Mboweni delivered the National Budget Speech on 23 February.
Releasing the amendments for public comment has meant that many South Africans are worried their retirement, provident, and pension funds will be mismanaged.
This after National Treasury indicated its intention to have pension funds invest in infrastructure projects.
Summary of the reform
1. Provident funds will have the same annuitisation rules as pension funds.
2. This means that members will only be able to access a third of their fund and reinvest the rest of their fund and receive monthly payments thereafter.
3. Any fund balance saved before 1 March 2021 won’t be affected and can be taken in cash on retirement.