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Retirement Funds and Investments

Medical Schemes and Medical Insurance

Wholistic Fee Based Financial Planning

Short Term Insurance: Personal and Commercial

Wholistic Independent Advice

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The following changes have been proposed:

 

  • Employer contributions to retirement funds to be fringe benefit taxed. [Proposed effective date: 1 March 2014]
  • Individual member taxpayer deductions for pension, provident and retirement annuity funds are to be consolidated with the following caps: Contribution deductions will be capped at 22.5% of the higher of employment or taxable income and with a maximum rand amount of R250 000 for those below age 45 and 27.5 per cent with a maximum rand amount of R300 000 for those above 45. These contribution limits will include the risk benefit and administration cost component of the contributions. Any employer contributions that have been fringe benefit taxed will be included in these caps. [Proposed effective date: 1 March 2014]
  • Minimum monetary threshold: Low income earners will be entitled to deduct    R20 000 even in cases where their contributions do not warrant this when applying the deduction scales. For example where a taxpayer's taxable income is R80 000, in the normal course of events the taxpayer would be entitled to a total deduction of R18 000 (R80 000 x 22.5%). The minimum deduction referred to above would allow this taxpayer a deduction of R20 000 if he in fact contributed an amount of R20 000 to retirement funds in total. [Proposed effective date: 1 March 2014]
  • Contributions not deducted: Where a contribution is not deductible (i.e. over 22.5%) in any year of assessment, these may be rolled over in all retirement funds for later use (e.g. at retirement against the lump sum or against the annuity income). Previously disallowed contributions were allowed against retirement lump sums in all cases and against annuity income only in the case of retirement annuity funds. [Proposed effective date: 1 March 2014]
  • Uniform approach to retirement fund withdrawals: Currently lump sum withdrawals upon retirement from pension and retirement annuity funds are restricted to a maximum of one-third of accumulated savings, whereas this restriction does not apply to provident funds. Consultations are to be held with interested parties on a uniform approach to retirement fund withdrawals, taking into account the legacy issues pertaining to provident funds in particular.
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