"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 provided 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 inserted by section 1(1)(zH) of the Revenue Laws Amendment Act, 2024, Notice No. 4924, GG50750 dated 4 June 2024 - comes into operation on 1 September 2024 and applies in respect of years of assessment commencing on or after that date (section 1(2))]