Regulatory Alerts2024-02-16
Added · Updated
FSCA Communication 3 of 2024 Requirements for Retirement Fund Rule Amendments Implementing the Two-Component System
The Financial Sector Conduct Authority requires retirement funds to amend their rules to implement the two-component system, effective 1 September 2024. Fund regulations must allocate contributions into a savings component comprising one-third of new contributions with a R30 000 seed capital and annual withdrawal rights, alongside a retirement component holding two-thirds that must fund an annuity. The directive further mandates specific seed capital calculations, defined benefit fund adjustments, tax-neutral cross-fund transfers, proportional Section 37D deductions, and timely member communication to ensure expedited rule amendment approvals.
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