Treasury backtracks again on unpopular change to provident fund rules
Treasury has once again backtracked on the implementation of the compulsory annuitisation of two-thirds of provident fund payouts on retirement. The measure — which has been fiercely opposed by trade unions — has once again been postponed for implementation to March 1 2019. The amendment to the Taxation Laws Amendment Act and the Revenue Laws Amendment Act was initially planned to come into effect in February 2016. In the face of strong opposition by labour, this was postponed to March 1 2018. Implementation has now been postponed again. Labour threatened to go on strike if the measure were adopted, arguing that workers needed the full cash payment of their provident fund savings in order to make once-in-a-lifetime purchases. Trade unions also argued that the proposal should await the finalisation of the comprehensive social security reform. The proposal would require that two-thirds of withdrawals from provident funds on retirement be converted into an annuity with one-third being ...
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