The Actuarial Society of SA (Assa) says the “two-bucket” pension system proposed by the Treasury, which would see pension savings split into one pot that must be preserved until retirement and another that can be accessed in emergencies, will boost long-term savings.

Actuarial modelling by Assa’s retirement matters committee shows that a two-bucket system that allows savers to allocate a percentage of their monthly retirement savings to a pot that is accessible in emergencies, would discourage them from cashing out all their savings when changing jobs. That would result in significantly higher monthly income when people retire, as the other bucket earmarked for long-term preservation would continue to benefit from the power of compounding...

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