“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]

“total retirement contribution” means any amount contributed to any pension fund, provident fund or retirement annuity fund in terms of the rules of that fund on or after 1 September 2024 by a person who is a member of that fund or any other person on behalf of that member, excluding any charges or premiums thereon;

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

“savings withdrawal benefit” means a portion of the member’s share of the value in a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund that the member has elected to withdraw from the portion of his or her share allocated to the savings component provided by that fund before termination of membership of the fund: Provided that-

(a)     the member’s right is limited to one withdrawal during a year of assessment;

(b)     where a member has multiple contracts in the same fund, one withdrawal during a year of assessment may be made from each of the contracts; and

(c)     the value of each withdrawal, before taking into account any charges or transaction costs, may not be less than R2 000: Provided that where a member terminates their membership in their respective funds within any year of assessment and such member has made a withdrawal from that fund as contemplated in paragraphs (a) or (b) and the value of the member’s interest in the savings component is less than R2 000, such member may be allowed a second withdrawal of the total balance in the savings component;

[Definition of “savings withdrawal benefit” be inserted by section 1(1)(zH) of Act 12 of 2024 effective on 1 September, 2024 and applicable in respect of years of assessment commencing on or after that date]

“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 the vested component as at 31 August 2024, as contemplated in paragraph (a) of the definition of “vested component”, limited to R30 000, is allocated to this component on or after 1 September 2024: Provided further 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 from that member’s retirement interest in that provident fund or provident preservation fund on 28 February 2021 and the increase in the value up to and including 31 August 2024 from that fund;

(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 as approved by the Financial Sector Conduct Authority;

(c)     payments or transfers from a similar component to a pension preservation fund or provident preservation fund by or on behalf of that member on or after 1 September 2024 is allocated to this component;

(d)     any amounts transferred from a similar 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 if the member’s total interest in that fund is transferred in terms of the rules of the fund;

(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; and

(g)     on the death of the member or former member, or on retirement of the member, the member’s interest in this component may on election of the member or nominee be—

(i)      on the death of the member paid to a nominee or dependant of the deceased member or former member; or

(ii)     on retirement, to the retired member and is deemed to be a lump sum benefit contemplated in paragraph 2(1)(a) of the Second Schedule and in the absence of a nominee or dependant, to the deceased’s estate as a lump sum benefit contemplated in paragraph 2(1)(a) of the Second Schedule-

Provided further that this definition shall not apply to a “legacy retirement annuity policy” as defined in section 1, that has been approved for exemption by the Financial Sector Conduct Authority, a “beneficiary fund”, “unclaimed benefit fund” and “pensioner” as defined in section 1 of the Pension Funds Act, and any person who is or was a member of a provident fund or provident preservation fund and who is or was 55 years of age or older on 1 March 2021, unless such person has elected to contribute to the “savings component”;

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

“retirement 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)     two-thirds 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 two-thirds 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 paragraph (ii) may allocate contributions utilising a reasonable method of allocation as approved by the Financial Sector Conduct Authority;

(b)     payments or transfers from a similar component to a pension preservation fund or provident preservation fund by or on behalf of that member on or after 1 September 2024 is allocated to this component;

(c)     any amounts transferred from a similar component of any other pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund on or after 1 September 2024 is allocated to this component; and

(d)     the total value of the member’s interest in the retirement component must be paid in the form of an annuity (including a living annuity), a combination of annuities (including a combination of methods of paying the annuity) or a combination of types of annuities except where the member’s interest in the retirement component calculated together with two-thirds of the member’s interest in the vested component does not exceed R165 000, where the employee is deceased or where the employee elects to transfer the retirement interest to a pension preservation fund, provident preservation fund or a retirement annuity fund: Provided that this provision shall not apply to a “legacy retirement annuity policy” as defined in section 1 (that has been exempted from this provision, subject to the conditions that may be required by the Financial Sector Conduct Authority), a “beneficiary fund”, “unclaimed benefit fund” and “pensioner” as defined in section 1 of the Pension Funds Act, and any person who is or was a member of a provident fund or provident preservation fund and who was 55 years of age or older on 1 March 2021, unless such person has elected to contribute to the retirement component: Provided further that in determining the value of the member’s interest in the retirement component calculated together with two-thirds of the member’s interest in the vested component an amount calculated as follows must not be taken into account-

(i)      in the case of a person who is or was a member of a provident fund or provident preservation fund and who was 55 years of age or older on 1 March 2021 who has elected to contribute to the retirement component-

(aa)   two-thirds of the members contribution to the vested component in a provident fund or transfers to the vested component in a provident preservation fund on or after 1 September 2024;

(bb)   with the addition of any other amount credited to the member’s individual account or minimum individual reserve of the vested component in the provident fund or provident preservation fund on or after 1 September 2024; and

(cc)   any fund return, as defined in the Pension Funds Act, in relation to the contribution or transfers contemplated in item (aa) or amounts credited contemplated in item (bb);

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