Today's Labour News

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AlexanderForbesBusinessLive reports that retirement fund administrator Alexforbes expects a retirement sector outflow of about R50bn when the ‘two-pot’ system is implemented in September.

It believes that the system will deliver long-term positive results for the sector and consumers. CEO Dawie de Villiers advised: “We have done a lot of modelling. We expect about 1% of the assets of the industry to be paid out in the first year of the system ... as a company we expect withdrawals of about R5bn. The whole industry has assets of about R5-trillion. So we expect about R50bn to be withdrawn from the whole industry. These are rough estimates.” He went on to indicate: “The great thing is that after the withdrawals, preservation kicks in. The outflows from the industry will be less and less in the outer years. I am excited about the two-pot system. It is going to be great for the man on the street.” The two-pot system is one of the most significant financial reforms in SA, splitting retirement contributions into two pots with one-third going into the savings pot, which workers can tap into if they are in a pinch, and the remaining two-thirds into a retirement pot, which is off limits until retirement. The changes are likely to have far-reaching implications for retailing, tourism and banking in a country where consumers battle heavy debt, high interest rates and a higher cost of living.

  • Read the full original of the report in the above regard by Kabelo Khumalo & Jacqueline Mackenzie at BusinessLive

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