Alexforbes processed more than R1bn in withdrawals since two-pot retirement system kicked in
Executive for solutions and enablement at Alexforbes, John Anderson, said that the figures had far outweighed expectations.
South African rands money
JOHANNESBURG - Retirement fund administrator Alexander Forbes said it had seen an outflow of more than R1 billion since the two-pot retirement system kicked in over a week ago.
This means it has processed more than 78,000 withdrawal requests from its members.
The two-pot system is one of the most significant financial reforms in the country, allowing cash-strapped consumers to tap into a portion of their retirement savings.
Executive for solutions and enablement at Alexforbes, John Anderson, said that the figures had far outweighed expectations.
"Of the R1.5 billion that’s being processed at the moment, at least R270 million of that is going to SARS but we’re still waiting for some tax directives from SARS to get the final figure so we do expect to be higher than that."
Anderson said that consumers not faced with an emergency would reap the reward of keeping more money invested until retirement.
"Because if you leave it there until retirement, then the tax treatment will be more favourable. In fact, the balance that you get at retirement can be subject at least R550,000 tax-free, so it’s actually better leaving it there for longer from a tax perspective."