Employer contributions will be taxed: Nasfund

THE employer’s contribution to a worker’s superannuation fund at Nasfund will be taxed when the employee retires and the fund is withdrawn, said Nasfund chief officer member services Charlie Gilichibi.
The reason for this is that the employer’s contribution is not taxed at the source, he said.
However, he said the contribution made by the employee is taxed at the source and will therefore not be taxed again when the employee retires and withdraws the fund.
Gilichibi was clarifying a report in The National newspaper last week on how superannuation funds are treated when employees retire and withdraw their funds.
“Member contributions of six per cent are paid out tax-free as they were already taxed on the way into super,” Gilichibi said.
“Employer contributions and accumulated interest attract a concessional tax, depending on the longevity of the savings in a superannuation plan.”
He said only the employers’ contributions and accumulated interest are taxed.
Gilichibi said a member exiting the fund will face a two per cent tax applied to employer contributions and accumulated interest for those who had been employed for more than 15 years.
This also applies if the member has been contributing for seven years or more and was aged over 50 years, or on death.