THE net is closing in on employees exploiting loopholes in pension fund administration to bankroll big-ticket items under the guise of buying homes.The Pension Funds Act allows employees to use their retirement fund credits as security for mortgages on existing or new property, or on other loans meant to extend or improve their homes. The amount which can be secured against retirement credits is subject to the rules of each fund.SA’s largest pension fund administrators say they have made progress stemming the bleeding, which has been draining the retirement fund market. Some resign to get hold of the money.South African Housing Club CEO Matthew Nell, speaking at the Alexander Forbes Hot Topics summit last week, said people earning less than R25,000 a month needed housing support. Pension-backed loans were a critical enabler.The majority of people (54%) earning R7,000-R25,000 a month either rented formal housing, lived in informal settlements or backyards, or in traditional dwellings...
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