“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 the savings component and the retirement component on or after 1 September 2024, that member may not be allowed to make contributions to this component from the month following the effective date of election;

 

(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 on termination of membership of the 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 on termination of membership of the fund; and

 

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

[Definition of “vested component” inserted by section 1(1)(zJ) of Act 12 of 2024 and substituted by section 1(1)(zH) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]

“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 the value of the member’s interest in the savings component is less than R2 000, such member may be allowed a withdrawal of the total balance in the savings component whether or not such member has made a withdrawal from that fund as contemplated in paragraph (a) or (b);

[Definition of “savings withdrawal benefit” inserted by section 1(1)(zH) of Act 12 of 2024 and substituted by section 1(1)(zG) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]

“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)     on retirement of the member-

 

(i)      the member’s interest in this component may on election of the member 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

 

(ii)     any portion of the member’s interest in this component not paid as contemplated in subparagraph (i) 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”:

 

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 or provident preservation 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 provident preservation fund, 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 the last day of the month in which the election was made is limited to R30 000, and must be allocated to this component effective on the last day of the month in which the election was made;

[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]

“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, if 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 are 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)       . . . . .

(c)     any amounts transferred from a retirement 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; 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 total member’s interest in the retirement component calculated together with two-thirds of the total member’s interest in the vested component does not exceed R165 000, where the member is deceased or where the member elects to transfer the retirement interest to a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund:

Provided 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 as 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 or provident preservation 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 provident preservation fund, unless such person has elected to contribute to this component within 12 months of 1 September 2024;

[Definition of “retirement component” added by section 1(1)(zF) of Act 12 of 2024 and substituted by section 1(1)(zE) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]

“member’s interest in the vested component” means the interest of a member of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund in a vested component established for that member by that fund, and includes-

 

(a)     the value of the interest of that member in that fund immediately prior to 1 September 2024;

 

(b)     any amount credited to that vested component on or after 1 September 2024; and

 

(c)     any fund return as defined in section 1 of the Pension Funds Act in relation to an amount contemplated in paragraph (a) or (b),

 

as determined in terms of the rules of the fund, which value, amount or fund return is-

 

(i)      reduced by the amount allocated as contemplated in paragraph (a) of the definition of “savings component”; and

 

(ii)     reduced proportionally by any amount deducted from a member’s benefit or minimum individual reserve in terms of section 37D(1)(a), (b), (c), (d)(i), or (d)(iA) of the Pension Funds Act or a similar provision in the Government Employees Pension Law, 1996 (Proclamation No. 21 of 1996), the Post and Telecommunication-Related Matters Act, 1958 (Act 44 of 1958), or the Transnet Pension Fund Act, 1990 (Act 62 of 1990), that is a retirement fund lump sum withdrawal benefit and in respect of the section 37D(1)(d)(iA), (d)(iB) or (e) deduction, an amount that is contemplated in section 7(11);

[Definition of “member’s interest in the vested component” inserted by section 1(1)(c) of Act 12 of 2024 and substituted by section 1(1)(b) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]

“member’s interest in the savings component” means the interest of a member of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund in a savings component established for that member by that fund, and includes-

 

(a)     any amount allocated to that savings component as contemplated in paragraph (a), (b), (c) or (d) of the proviso to the definition of “savings component”;

 

(b)     any amount credited to that savings component on or after 1 September 2024; and

 

(c)     any fund return as defined in section 1 of the Pension Funds Act in relation to an amount contemplated in paragraph (a) or (b),

 

as determined in terms of the rules of the fund, which amount or fund return is-

 

(i)      reduced by any amount withdrawn as contemplated in the definition of “savings withdrawal benefit”; and

 

(ii)     reduced proportionally by any amount deducted from a member’s benefit or minimum individual reserve in terms of section 37D(1)(a), (b), (c), (d)(i) or (d)(iA) of the Pension Funds Act or a similar provision in the Government Employees Pension Law, 1996 (Proclamation No. 21 of 1996), the Post and Telecommunication-Related Matters Act, 1958 (Act 44 of 1958), or the Transnet Pension Fund Act, 1990 (Act 62 of 1990), that is a retirement fund lump sum withdrawal benefit and in respect of section 37D(1)(d)(iA) deduction, an amount that is contemplated in section 7(11);

[Definition of “member’s interest in the savings component” inserted by section 1(1)(c) of Act 12 of 2024 and substituted by section 1(1)(b) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]

“member’s interest in the retirement component” means the interest of a member of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund in a retirement component established for that member by that fund, and includes-

 

(a)     any amount allocated to that retirement component as contemplated in paragraph (a) or (c) of the definition of “retirement component”;

 

(b)     any amount credited to that retirement component on or after 1 September 2024; and

 

(c)     any fund return as defined in section 1 of the Pension Funds Act in relation to an amount contemplated in paragraph (a) or (b),

 

as determined in terms of the rules of the fund, which amount or fund return is reduced proportionally by any amount deducted from a member’s benefit or minimum individual reserve in terms of section 37D(1)(a), (b), (c), (d)(i), (d)(iA), (d)(iB) or (e) of the Pension Funds Act or a similar provision in the Government Employees Pension Law, 1996 (Proclamation No. 21 of 1996), the Post and Telecommunication-Related Matters Act, 1958 (Act 44 of 1958), or the Transnet Pension Fund Act, 1990 (Act 62 of 1990), that is a retirement fund lump sum withdrawal benefit and in respect of a section 37D(1)(d)(iA) deduction, that is an amount contemplated in section 7(11);

[Definition of “member’s interest in the retirement component” inserted by section 1(1)(c) of Act 12 of 2024 and substituted by section 1(1)(b) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]

“legacy retirement annuity policy” means any policy issued to a retirement annuity fund by a long-term insurer before 1 September 2024 with a pre-universal life or universal life construct that meets the conditions determined in an official notice by the Financial Sector Conduct Authority;

[Definition of “legacy retirement annuity policy” inserted by section 1(1)(b) of Act 12 of 2024 and substituted by section 1(1)(a) of Act 44 of 2024 deemed to have come into operation on 1 September, 2024]

“liquidation and distribution account” means the account required to be submitted by an executor to a Master in accordance with section 35 of the Administration of Estates Act, 1965 (Act 66 of 1965);

[Definition of “liquidation and distribution account” inserted by section 4(1)(e) of Act 20 of 2021 effective on 1 March, 2022 and applicable in respect of liquidation and distribution accounts finalised on or after that date]