STEPHEN CRANSTON: Far too many South Africans retiring as paupers — surveys
Alexander Forbes and Sanlam reports highlight need for strict rules on withdrawals from pension funds
Few people retire with enough money. The number one culprit is that SA is one of the few jurisdictions in which people are given full and unrestricted access to their retirement savings whenever they change jobs.
In many cases, these withdrawals are not done because of financial hardship. I was guilty of taking out money myself when I resigned from the Argus Group to pay for what seemed important, but with hindsight was just frivolous consumer spending. Yet compulsory preservation is one of those politically unacceptable goals which the union movement will not accept. There has been enough debate on the far less controversial issue of annuitisation of provident funds. It is utterly irresponsible that provident funds pay out the entire accumulated retirement savings of a member in cash. In time, but with a generous phasing-in period, provident funds will have the same exit rules as pension funds, just a third can be taken out in cash, and some consider even that to be too gener...
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