Two-pot system will not enable savers to easily draw down a third of their accumulated wealth
28 April 2024 - 14:49
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Brian Kantor seems to believe the two-pot system will enable savers to easily draw down a third of their accumulated wealth held in pension funds and retirement annuities (“Wealth may matter more than income”, April 26).
It does nothing of the sort. Legacy retirement annuity policies are excluded, and withdrawals on current accumulated wealth are limited to 10% — with a maximum of R30,000. The average fund balance in SA is well below R300,000, and those with large balances are unlikely to need the facility.
On new contributions, access to one third of contributions will be more than offset by mandatory preservation of the balance. The net effect should be more saving, not less. That is the whole point.
Chris Veegh
Via BusinessLIVE
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Kantor seems somewhat confused
Two-pot system will not enable savers to easily draw down a third of their accumulated wealth
Brian Kantor seems to believe the two-pot system will enable savers to easily draw down a third of their accumulated wealth held in pension funds and retirement annuities (“Wealth may matter more than income”, April 26).
It does nothing of the sort. Legacy retirement annuity policies are excluded, and withdrawals on current accumulated wealth are limited to 10% — with a maximum of R30,000. The average fund balance in SA is well below R300,000, and those with large balances are unlikely to need the facility.
On new contributions, access to one third of contributions will be more than offset by mandatory preservation of the balance. The net effect should be more saving, not less. That is the whole point.
Chris Veegh
Via BusinessLIVE
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
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