Two-pot system: R35 BILLION in withdrawals processed, questions asked around admin fees

Stephen Grootes interviews well-known journalist and financial industry consultant Bruce Cameron.

Over R35 billion's worth of withdrawals have been processed in the 11 weeks since the two-pot retirement system came into effect, says the South African Revenue Service. (Sars corrected an earlier statement which said almost R50bn had been withdrawn)

Over 2,1 million applications were received, and more than 1,9 million directives issued.

Close to 240 000 applications did not result in directives issued, around 41 000 of these because the applicants did not actually have enough money in their pension funds.

Business Day reports that the Financial Sector Conduct Authority (FSCA) is probing the charges imposed by pension fund administrators on these two-pot withdrawals.

Stephen Grootes gets comment from well-known journalist and financial industry consultant Bruce Cameron, co-author of The Ultimate Guide to Retirement in South Africa.

While fund administrators can 'virtually ask anything' in this instance, Cameron says from what he's seen so far, most are charging realistic fees.

"There are different ways to charge... and they all seem to be using these either in combination or separately, so it's difficult to compare them, but most would seem to be reasonable so far."

"I think the problem probably lies with the smaller administrators, rather than the big guys."

Bruce Cameron, Journalist and Author

Aside from people not being aware of the administration costs that withdrawal would entail, many also didn't take into account the fact that they would be taxed on this, Cameron says.

"I don't think individuals realised the total costs to them... I still believe this is a very bad idea."

Bruce Cameron, Journalist and Author

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