Retirement benefit savings legislation changes
Editor’s Note: The changes to the treatment of retirement savings have been in the market for a while. However, now they are really here, please don’t underestimate the impact they may have both practically in payroll changes you need to have ready for March 2016, but also in creating uncertainty amongst employees (fear of the unknown).
In the Taxation Laws Amendment Act, 2015, some of the Government’s retirement reform proposals first tabled in 2013, were passed into law. The new rules aim to bring into line the tax treatment and annuitisation requirements for all types of retirement funds (pension, provident and retirement annuity funds).
Further detail on the changes will be circulated in a separate HRTorQue reporter in the next few days. Suffice to say the changes will impact both employers and employees for contributions made to both defined benefit and defined contribution schemes.
As a result the changes will directly impact payroll in March 2016 (impacting net pay, PAYE, SDL and UIF) requiring employers to accurately source information from pension providers and administrators. In addition, recent negative press publicity is likely to create uncertainty amongst employees – we highly recommend running training courses to update employees and resolve this uncertainty.
If you require assistance gathering information, considering the impact of changes on your business or training employees and would like a consultation with your payroll consultant and/or one of our other specialist consultants please let us know and we can set up the meetings.