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August 2024

16Aug

South Africa. Should government use pensions to fund it projects?

Government forcing pension funds to invest in its projects have long been a discussion in South Africa and the ANC promised to implement it after the elections to pay for economic development and industrialisation. Dr David Masondo, deputy minister of finance, said at an Old Mutual event on Tuesday that government is committed to respect the investment mandates of pension funds to increase investment turnover based on acceptable risk. Then he referred to Regulation 28 of the the Pension Funds Act that...

August 16, 2024
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06Aug

South Africa’s two-pot retirement threat

South Africa has a dismal savings rate, with more money flowing out of retirement vehicles than being put in—and the Reserve Bank warns there is a slight chance the new two-pot retirement system will exacerbate the problem. According to the latest 10X Investments Retirement Reality Report 2023, only 6% of South Africans are on track to retire comfortably. A comfortable retirement means being able to afford 70% of your pre-retirement income during retirement. The report is based on findings from the 2023...

August 6, 2024
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July 2024

22Jul

South Africa. Key two-pot bill signed into law

President Cyril Ramaphosa has signed into law the Pension Funds Amendment Bill that is key for the implementation of the two-pot retirement system, which takes effect on September 1. The signature into law of the bill gives legal certainty to the retirement industry, which has been implementing the necessary changes. The new system will provide members of retirement funds with the ability to access part of their retirement savings without having to resign or cash out their pension funds. The new...

July 22, 2024
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04Jul

South Africa. Pension fund members hope to pay off debt from two-pot retirement withdrawals

Pension fund members hope to pay off some debts from their two-pot retirement system withdrawals as financial pressures force 50% of consumers to cash in their retirement funds in an environment where even high-income consumers are failing to pay their home loans. And if they use money from Peter to pay Paul, they will also have to pay the tax man. According to Sanlam Benchmark research that will be revealed next week, Sanlam found in 2022 that just 31% of...

July 4, 2024
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June 2024

25Jun

South Africa. Cosatu works with stakeholders on two-pot system implementation

The Congress of South Africa’s Trade Unions (Cosatu) General Secretary, Solly Phetoe says the affiliation is working with the National Treasury, the Financial Sector Conduct Authority (FSCA) and pension funds at Nedlac to ensure a smooth implementation of the two-pot system on September 1. The two-pot retirement system is confirmed to rollout on September 1 when workers will be able to access 10% or up to R30 000 of their existing pension funds. Phetoe says Cosatu condemns anyone that spreading misinformation...

June 25, 2024
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13Jun

South Africa. Government pension fund systems offline for months after ransomware attack

The Government Employees Pension Fund (GEPF) suffered a cyberattack in February 2024, and it only expects to restore its self-service functionality by 21 June 2024. A notice published on the GEPF’s social media pages says the self-service functionality on its web platform and app was still offline due to the data breach at the Government Pensions Administration Agency (GPAA). “The GPAA has determined that a total rebuild of the platforms is necessary to ensure a stronger platform,” it said. It is expected...

June 13, 2024
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12Jun

South Africa. Two Pot Retirement System

What is a two-pot retirement? The two-pot retirement system is a reform that will allow retirement fund members to make partial withdrawals from their retirement funds before retirement, while preserving a portion that can only be accessed at retirement to help improve retirement outcomes. This means members need not resign to access part of their retirement benefit if they are in financial distress. This reform will come into effect on 1 September 2024. Who is it meant for? The new system will...

June 12, 2024
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May 2024

20May

South Africa. New law enables pension fund members to access their savings

Pension fund members are set to access a third of their pensions within the next four months. The National Assembly unanimously approved the Pension Fund Amendment Bill after it was sent back for concurrence by the National Council of Provinces (NCOP) with technical amendments. The bill, introduced by Finance Minister Enoch Godongwana in January, provides for a “two-pots” system that divides pension contributions into two separate pots: a savings pot and a retirement pot, with effect from September. It proposes that retirement...

May 20, 2024
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April 2024

16Apr

South Africa. The system is offline — Government pension fund goes silent after data breach

The Government Employees Pension Fund’s (GEPF) systems are still down following a data breach from the LockBit ransomware group in mid-February 2024. As a result, government employees cannot log into the GEPF website or its smartphone app, leaving them in the dark about the latest value of their pensions. Several readers have informed MyBroadband of the issues experienced when attempting to access the system in recent weeks. “We are still not able to log into the GEPF website and the cell phone...

April 16, 2024
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March 2024

25Mar

South Africa. Two-pot system: how the state is dealing with its own funds

There are three pension funds in the country, including South Africa’s largest fund, that are not governed by the Pension Funds Act, and National Treasury needs to deal with these separately in implementing its famous two-pot retirement system. I refer to three government pension funds, in particular the Government Employees Pension Fund (GEPF), which holds more than R2.3 trillion in assets and has almost 1.3 million active members and another 475 000 pensioners and beneficiaries. This fund is constituted under...

March 25, 2024
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