NATIONAL TREASURY RELEASES RETIREMENT REFORM DISCUSSION PAPERS FOR PUBLIC COMMENT
National Treasury has published the following two discussion papers for public comment:
Encouraging South African households to save more for retirement: This paper deals with the key outstanding proposals regarding the promotion of higher level of savings, expanding coverage and promoting better preservation and more consolidation to reduce the costs and charges on retirement fund members. It proposes the introduction of a “two-pot system”, which will enable the restructuring of retirement contributions into two pots. One pot is to be preserved until retirement (two-thirds), while the other would enable pre-retirement access (one-third).
Governance of umbrella funds: National Treasury is concerned about the governance of some retirement funds and the consequences of poor governance on member outcomes. Governance challenges include, amongst other things, over-dependence of board members on product and service providers for advice and conflicts between loyalties to members and to those who elected or appointed the board members. The discussion paper proposes several policy options aimed at strengthening governance principles, structural solutions and greater transparency regarding costs and charges.
To read the National Treasury’s media statement, click here.
To read the ‘Encouraging South African households to save more for retirement’ discussion paper, click here.
To read the ‘Governance of umbrella funds’ discussion paper, click here.