Parliament Adopts Revenue Laws Amendment Bill, 2025: A Key Step in Retirement Reform
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South Africa’s retirement savings system just got a major update. On July 22, 2025, the National Assembly officially passed the Revenue Laws Amendment Bill, 2025. This new law clears up how the two-pot retirement system works, a system that started on 1 September 2024 and allows people to access part of their retirement savings early, while keeping the rest safe for retirement.
The Bill changes parts of the Income Tax Act, 1962, to make sure the new system runs smoothly and the rules are clear for everyone involved from retirement fund members to administrators.
Key highlights of the Bill:
Clarity for Two-Pot System
The Bill outlines how the two-pot retirement system operates, giving fund members and administrators clear legal guidance. This system allows limited early access to retirement savings while preserving the rest for actual retirement.
Exemptions for Certain Members
Members of provident funds who were over 55 on 1 March 2021 and remain in the same fund are excluded from the new system, unless they choose to opt in within 12 months from 1 September 2024.
Updated Definitions
The Bill standardises key terminology such as "retirement component", "savings component", and "vested component" across applicable tax legislation to eliminate ambiguity.
Effective Date Adjustments
Amendments specify the "seeding date" and align effective dates with fund rules and regulations for consistency.
Transfer Conditions
It includes guidelines for how transfers between components should be handled upon withdrawal, addressing limitations on certain fund transfers.
Retrospective Provisions
Certain elements of the Bill are deemed effective from 1 September 2024, ensuring legal certainty for actions already taken under the new system.
The draft Bill was published in December 2024, with a public comment period closing on 17 January 2025. It underwent extensive consultation, including public hearings conducted by the Standing Committee on Finance in July 2025.
This legislative development solidifies South Africa’s retirement reform framework and provides essential clarity for fund administrators, financial professionals, and retirement fund members alike.
