The Taxation Laws Amendment Act No. 20 of 2022 (“TLAA”) was promulgated in Government Gazette No. 47826 on 5 January 2023.

The TLAA includes the following changes relevant to retirement funds

• Allowing for partial transfers on retirement annuity funds

• Protecting the vested benefits of members of a provident fund on 1 March 2021 if that member transfers their benefit to a public sector fund

• Allowing a member of a provident fund to retire before age 55

• Allowing for the transfer of an in-fund living annuity to another fund.

• Clarifying that death benefits payable by a fund can be paid to an unclaimed benefit fund where there are no beneficiaries or an estate

Allowing for partial transfers on retirement annuity funds

Previously, retirement annuity fund members with more than one contract in a specific retirement annuity fund were restricted to transferring all the contracts from one retirement annuity fund to another. Members of retirement annuity funds were required to transfer 100% of their interest in that retirement annuity fund to the other fund. This restriction did not apply to members of preservation funds.

The annuitisation principles across all retirement funds, which came into effect on 1 March 2021, resulted in tax-free transfers between all funds. The definition of “retirement annuity fund” in the Income Tax Act (“ITA”) allows a member of a retirement annuity fund to transfer their total interest in any approved retirement annuity fund into another approved retirement annuity fund.