Budget 2017
PENSIONS: Getting in line with reality
Confusion over the future of pension and provident funds remains. The budget did not make that any easier to understand
With personal taxes up and an increase in dividend withholding tax from 15% to 20%, the tax breaks from retirement funds continue to get more valuable.There is still confusion about the future of pension and provident funds, and the budget did not make that easier to understand. There is a stalemate over plans to force provident fund members to take pensions instead of lump sums at retirement. Treasury had planned to introduce this in the 2016 financial year, but the budget document says nothing will be introduced until there is consensus at the National Economic Development & Labour Council.Arno Loots, head of Liberty’s umbrella funds unit, says that the only stick treasury has deployed is to indicate that provident fund contributions will lose their recently gained tax-free status unless the parties agree to accept forced pensions (or compulsory annuitisation).Loots says that an interesting suggestion in the budget documents is that treasury and the retirement industry should look...
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