The pension-funds adjudicator wants answers on how certain provisions in the Income-Tax Act affect approved retirement annuity-fund rules.
He has given the Competition Commission (CC) and the South African Revenue Service (Sars) until July 26 to respond to his questions in writing.
This is part of the order given in a matter involving the transfer, prior to retirement age, of a retirement annuity fund to another, the office of Vuyani Ngalwana said in a statement on Thursday.
”The purpose for the joinder [of the CC and Sars] is for them to answer certain questions relating to the impact of the provisions of the Income-Tax Act on fund rules which restrict transfers out of retirement annuity funds, and the applicability of the provisions of the Competition Act to the ‘locking-in’ of retirement annuity fund members.”
The complainant in the matter became a member of the South African Retirement Annuity Fund, administered and underwritten by Old Mutual, in 1986, when he started making recurring contributions to the fund.
In 2005, he wanted to transfer his member’s interest in the fund to the Allan Gray Retirement Annuity Fund as he was not satisfied with Old Mutual’s allegedly poor investment returns.
The fund, relying on rules that allow transfers out of the fund only in certain specified circumstances, turned down his request.
The member then lodged a complaint with the adjudicator.
”The Income-Tax Act requires a retirement annuity fund to have a rule which authorises the transfer of a member’s interest in the fund to another approved retirement annuity fund,” the office said.
Once the submissions have been received the adjudicator will make a final ruling. — Sapa