Paragraph 6B (Second Schedule) – Transfer between the components of the retirement system: Deductions

TRANSFER BETWEEN THE COMPONENTS OF THE RETIREMENT SYSTEM: DEDUCTIONS

 

6B.    The deduction to be allowed from an amount contemplated in paragraph 2(1)(d) is equal to so much of that amount as is transferred for the benefit of a person from the-

 

(a)     savings component into the member’s retirement component in that same fund;

 

(b)     vested component into the member’s retirement component in that same fund;

 

(c)     savings component in that fund into the member’s or former spouse of that member’s savings component or member’s or former spouse of that member’s retirement component in another pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund;

 

(d)     vested component in that fund into the member’s or former spouse of that member’s vested component or member’s or former spouse of that member’s retirement component in another pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund;

 

(e)     retirement component into the member’s or former spouse of that member’s retirement component of another pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund; and

 

(f)        vested component into the member’s savings component in that same fund for purposes of the allocation as contemplated in paragraph (a) of the “savings component” definition-

 

Provided that any transfers contemplated under item (c), (d) or (e) are only permissible on termination of membership in the transferor fund or as contemplated in paragraph 2(1)(b)(iA): Provided further that any transfers contemplated under item (c), (d) or (e) are only permissible if all the remaining components are transferred into the same transferee fund.

[Paragraph 6B added by section 4(1) of Act 12 of 2024 effective on 1 September, 2024 and applicable in respect of years of assessment commencing on or after that date]

“Vested component” definition of section 1 of ITA

“vested 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)     the member’s interest in this component, after taking into account the allocation of the amount contemplated in paragraph (a) of the definition of “savings component”, is subject to and must be paid in accordance with the rules of the fund that exist immediately prior to 1 September 2024;

(b)     no contributions may be made to this component on or after 1 September 2024, except in the case of a person who was a member of a provident fund and is still a member of the same provident fund and who was 55 years of age or older on 1 March 2021: Provided that where the above-mentioned member has elected to make contributions to this component on or after 1 September 2024, that member may not be allowed to make contributions to the savings component or the retirement component;

(c)     the member may, in accordance with the rules of the fund that exist immediately prior to 1 September 2024, elect to transfer the value of this component into the member’s vested component of another pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund;

(d)     the member may elect to transfer the value of this component into the member’s retirement component of another pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund; and

(e)     the member may elect to transfer the value of this component into the member’s retirement component of the pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund;

[Definition of “vested component” inserted by section 1(1)(zJ) of Act 12 of 2024 effective on 1 September, 2024 and applicable in respect of years of assessment commencing on or after that date]