PENSION FUNDS
Will Treasury’s new ‘two-pot’ plan save SA pensioners?
It’s all systems go for the new retirement system, which allows employees to draw from their pension funds without the same penalties as before
The pandemic has shown up many fault lines in SA society, not least the financial stress that salaried individuals are buckling under. Yet 61% of retirement savers have, on average, just R37,000 stashed away, according to data from the Association for Savings and Investment SA. That will buy a retiree a life annuity of only about R210.90 a month.
Shrinking disposable income has also prompted many employees to quit their jobs, cash in their retirement savings and pay off debt over the past few years. In fact, as Jaco van Tonder, director of advisor services at Ninety One, tells the FM: “In many sectors, such as mining and retail, retirement funds are seen as saving funds by contributors.” When an employee leaves their job, they cash in their retirement savings, as the law allows for it...
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