“savings component” means a component established in terms of the rules of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund for a person who is a member of that fund: Provided that the rules of the fund provide that-
(a) a one-off amount of 10 per cent of the total value of each contract in the fund as at 31 August 2024, limited to R30 000, is allocated to this component on or after 1 September 2024: Provided that-
(i) the amount may be determined on or after 1 September 2024, and the allocation must be backdated to that date; and
(ii) in the case of any person who is or was a member of a provident fund or provident preservation fund and who is or was 54 years of age or younger on 1 March 2021, the one-off amount is to be calculated proportionally between that member’s fund value in that provident fund or provident preservation fund on 28 February 2021, including the increase in the value up to and including 31 August 2024 from that fund, and the value of contributions received on or after 1 March 2021, including any fund return on those contributions;
(b) one-third of the total retirement contributions to a pension fund, provident fund or retirement annuity fund by or on behalf of that member on or after 1 September 2024 is allocated to this component: Provided that-
(i) in determining the value of the contributions to this component an amount of charges and risk premiums deductible against such contributions must not be taken into account;
(ii) in the case of funds with a defined benefit funding structure, the total value attributed to this component on or after 1 September 2024 is to be determined with reference to one-third of the member’s “pensionable service” as contemplated in the rules of that fund on or after 1 September 2024; and
(iii) a fund with a defined benefit structure that is unable to allocate contributions as contemplated in subparagraph (ii) may allocate contributions utilising a reasonable method of allocation approved by the Financial Sector Conduct Authority;
(c) . . . . .
(d) any amounts transferred from a savings component of any other pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund on or after 1 September 2024 are allocated to this component;
(e) the member may elect to allocate the value of the member’s interest in this component into the member’s retirement component in that fund;
(f) the member’s interest in this component or portion thereof may be paid in the form of a savings withdrawal benefit;
(g) the member’s interest in this component may, on election of the member or nominee-
(i) on the death of the member, be paid to a nominee or dependant of the deceased member and is deemed to be a lump sum benefit contemplated in paragraph 2(1)(a) of the Second Schedule; or
(ii) on retirement, be paid to the retired member and is deemed to be a lump sum benefit contemplated in paragraph 2(1)(a) of the Second Schedule and any portion of the member’s interest in this component not paid as a lump sum benefit must be added to the amount available to be paid in the form of an annuity, a combination of annuities or a combination of types of annuities as contemplated in paragraph (d) of the definition of “retirement component”:
[Paragraph (g) substituted by section 1(1)(i) of Act 6 of 2025 deemed effective on 1 September, 2024]
Provided further that this definition shall not apply to-
(i) a “beneficiary fund”, “pensioner” or “a member to whom an unclaimed benefit” as defined in section 1 of the Pension Funds Act is due at 31 August 2024, a fund where a liquidator has been appointed in terms of the Pension Funds Act before 31 August 2024 and a fund with no member assets immediately before 1 September 2024;
(ii) a legacy retirement annuity policy; or
(iii) any person who is or was a member of a provident fund and who was 55 years of age or older on 1 March 2021 and is still a member of the same provident fund, or any person who is a member of a provident preservation fund and who was 55 years of age or older on 1 March 2021, unless such person has elected to contribute to this component within 12 months of 1 September 2024, in which case a one-off amount of 10 per cent of the value of the member’s vested component as at 31 August 2024 or the last day of the month in which the election was made, or as may be determined by the rules of the fund, limited to R30 000, must be allocated to this component effective on the last day of the month in which the election was made;
[Paragraph (iii) substituted by section 1(1)(j) of Act 6 of 2025 deemed effective on 1 September, 2024 (instructions erroneously refer to paragraph (iii) of the further proviso to paragraph (b) of the proviso)]
[Definition of “savings component” inserted by section 1(1)(zH) of Act 12 of 2024 and substituted by section 1(1)(zF) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]