The two-pot retirement system was implemented in September last year to give people access to their retirement savings for emergencies.
During the four months since the implementation of the two-pot retirement system, more than 2.5 million taxpayers withdrew more than R43 billion from the savings pot of their retirement savings under the two-pot retirement system.
According to Sars, it received 2 664 279 applications for tax directives for withdrawals from the savings withdrawal benefit of the two-pot retirement system and approved 2 403 379 tax directives for funds to be released.
The rest were declined for a variety of reasons, including incorrect identity numbers and incorrect tax numbers. Sars says a total gross lump sum of R43.42 billion has been paid out to date.
Sars’ simulated WhatsApp calculator was used 90 283 times, while the calculator on its website was used 952 403 times. Sars has also received 128 802 queries through its voice channel and 24 278 at branches.
According to Sars, it noted that some wilfully understate their incomes. Sars commissioner Edward Kieswetter says Sars is deeply concerned that 213 654 taxpayers declared incorrect taxable income to get a more favourable tax rate.
“If taxpayers understate their income, they are intentionally involved in evading their tax obligation. A penalty will be imposed on taxpayers who understate income. Taxpayers must refrain from this unbecoming conduct that borders on criminality. There are real consequences for this behaviour”.
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Old Mutual pays out R3.6 billion under two-pot retirement system
Michelle Acton, chief customer officer at Old Mutual Corporate, says Old Mutual received over 306 000 applications and approximately 650 savings pot claims per day. Less than 3% of the claims were rejected by Sars.
So far, Old Mutual has paid out about R3.6 billion, with about R900 million paid to Sars. In approximately 0.5% of the claims, members had their entire benefit paid to Sars for arrears taxes. The average claim amount was about R12 000.
Acton says 88% of the claims were from members earning below R30 000 per month, while 60% were from members aged between 30 and 45.
AlexForbes pays out over R7 billion under two-pot retirement system
Vickie Lange, head of research, best practice and Academy at AlexForbes, says AlexForbes received over 370 000 savings pot claims to a total value of over R7 billion, with 98% of claims paid.
“About 80% of claimants from our member survey, where we analysed over 8 200 responses, indicated that they used their savings to reduce debt and pay for essential living expenses.”
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Momentum pays out R3.7 billion under two-pot retirement system
Johann van Tonder, economist and researcher at the Momentum Group, says Momentum received 230 936 claims, including cancellations, and 211 166 were valid. He notes that the number of valid claims slowed drastically from 147 532 in September to 40 768 in October, 15 345 in November and 7 521 in December.
Members claimed R3.9 billion so far, and R3.7 billion was paid, with 20.9% of the paid amount going to Sars. Almost 5 000 of the claims went to Sars due to tax debt.
NMG Benefits pays out about R950 million under two-pot retirement system
Siphamandla Buthelezi, head of platforms at advisory firm NMG Benefits, says NMG Benefits received 48 708 claims so far and successfully processed and paid out 47 498 claims. The total amount paid out before tax is R925 836 803.86, with R252 386 029.39 paid in taxes.
He says 779 members had claims with IT88, meaning their entire two-pot savings were allocated to Sars due to outstanding tax liabilities. The largest single payout to a member was R49 400, while the smallest payout was R1 680. The average member withdrawing from the savings pot was 40 years old with an average salary of R30 000 per month.
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Liberty pays out R212 million under two-pot retirement system
Liberty says on its retail side it received 35 000 applications, including general enquiries about the two-pot retirement system, of which 15 829 were successful and paid out R212 257 451.42 in gross value, with R57 560 572.99 paid to Sars.
The full value of 190 claims was paid to Sars for tax in arrears for an amount of R1 592 148.77. The biggest amount paid to a member was R64 053 before tax, with the member receiving R35 230. Another member received R39 813 for a claim of R57 700, with R17 887 going to tax.
The average member who withdrew under the two-pot retirement system was in the age group between 40 and 49.
On the corporate side, Liberty received 62 000 claims, of which 48 600 were successful, with R600 million paid out so far and R155.6 million going to tax. Liberty says 6% of the claims processed had an IT88 linked to them, with the full payment in 2% of the claims going to Sars.
The biggest amount paid out to a member was R34 500 after tax. Liberty says 75% of claimants fell into the age group 30–50, with 40% in the group 40–49.
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PPS Investments pays out R6 million under two-pot retirement system
PPS Investments received 529 applications to withdraw from the savings pot under the two-pot retirement system, with 483 successfully paid out. R6 975 703,60 was paid out after fees and tax were deducted.
The biggest amount paid out to a single member was R62 272,55 after fees and tax, while the smallest amount paid out to a single member amounted to R656,66 after deductions. The average age of someone who withdraws is 44.
“Contrary to the trend reported by other financial providers, we experienced very low outflows from the implementation of the two-pot retirement system. We believe this trend will continue given the income resilience of our graduate professional member base and ongoing communication and education engagements with our advisers and members.”
Government Pensions Administration Agency receives almost 500 000 applications
Mack Lewele, director of communications and public relations at the Government Pensions Administration Agency, says the agency received 487 289 qualifying applications and paid 468 775 of them.
The agency will determine the total amount paid at the end of the financial year when it releases its annual report, he says. By 18 November last year, the agency had paid out R9.3 billion for 343 602 claims.
