IRFA Welcomes Budget Relief for Savers, Urges Action on Critical Technical Reforms to Benefit Members

The Institute of Retirement Funds Africa (IRFA) welcomed the inflation-related relief for savers announced in the 2026 National Budget, while simultaneously urging National Treasury and SARS to address outstanding technical and administrative blockages that continue to hinder the efficient operation of retirement funds and negatively impact member outcomes.

Finance Minister Enoch Godongwana’s budget provided welcome news for retirement fund members by increasing key thresholds, including the tax-free savings annual contribution limit to R46,000 and the retirement fund contribution deduction cap to R430,000. These adjustments, which were key tenets of IRFA’s pre-budget submission, provide meaningful relief against inflationary pressures and encourage a healthier savings culture in South Africa.

“We commend the Minister and National Treasury for heeding the call to protect the value of retirement savings against inflation,” said Geraldine Fowler, President of the IRFA. “Adjusting these thresholds is a vital step in ensuring that the legislative framework continues to support South Africans in building adequate capital for their retirement. It shows a clear commitment to the long-term financial security of the nation.”

However, the IRFA noted that the majority of its technical proposals, submitted in November 2025 to address specific administrative challenges, were not addressed in the current budget cycle. These include the ongoing requirement for tax directives on non-taxable Section 14 transfers, which creates significant administrative backlogs, and several unaddressed technical corrections related to the two-pot retirement system that affect member portability and access to small savings pots.

Of particular concern is the budget’s proposal to legislate a cumulative approach to the de minimis threshold for living annuities. The IRFA had strongly advocated for a per-policy application to align with Treating Customers Fairly (TCF) principles and allow members with multiple small policies to access their capital efficiently. The proposed amendment runs contrary to this and will disadvantage members while increasing administrative complexity for insurers.

“While we celebrate the progress on inflationary relief, we cannot overlook the operational challenges that remain,” stated Ms Fowler. “Issues like the Section 14 directive process and the living annuity commutation rules are not just abstract technicalities; they have real-world consequences for members, leading to delays, increased costs, and the erosion of small savings. We are particularly concerned that the proposed de minimis amendment will harm, rather than help, annuitants with modest savings."

The IRFA remains committed to working collaboratively with National Treasury, SARS, and the FSCA to resolve these outstanding matters. The Institute will submit formal commentary on the draft Taxation Laws Amendment Bill and will continue to advocate for a regulatory framework that is efficient, fair, and serves the best interests of all retirement fund members in South Africa.