Pension funds must apply to the FSCA to change their rules to make provision for the two-pot retirement system.
The FSCA says the implementation of the two-pot retirement system was a huge success. The two-pot retirement system was a major change in the industry with assets to the value of R3.15 trillion managed by 887 active retirement funds for approximately 155 000 active employers in funds under FSCA supervision.
Corlia Buitendag, departmental head: Retirement Funds Conduct Supervision at the Financial Sector Conduct Authority (FSCA), said at a media roundtable on Friday that the successful implementation was thanks to all partners, including the pension funds industry, National Treasury, Sars, FSCA, labour and civil society.
Since the implementation of the two-pot retirement system, the FSCA received 853 applications for rule amendments from pension funds and registered 837 registered (98% completion), with 11 applications still waiting for responses from industry and five with analysts for consideration.
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Pension funds asked about withdrawal fees
Buitendag said pension funds under FSCA supervision have been requested to submit weekly updates about withdrawals and they have now also been requested to give more information about how much they charge for two-pot retirement system withdrawal claims.
Sars said earlier this week that it received 2 153 942 requests for tax directives so far, to a total gross value of just over R35 billion.
According to Buitendag, people earning between R180 000 and R239 988 per year made up 25.82% of the withdrawals, while people earning between R60 000 and R119 988 made up 25.02%. People earning between R120 000 and R179 988 made up 15.67% and those earning between R240 000 and R359 988 13.83%.
According to age, people between the ages of 31 and 41 withdrew the most at 41.85%, while people between the ages of 41 and 51 made up 24.86%. Those between 51 and 60 were at 13.16% and those between the ages of 21 and 31, at 9.47%.
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Two-pot retirement system challenges and complaints
Buitendag said pension funds highlighted these challenges and complaints in their weekly updates:
- Some system related challenges, including getting tax directives from Sars, due to high volumes;
- Members providing incorrect tax numbers;
- Delays in seeding the savings pots;
- Delays due to account verification issues;
- Payment delays and challenges with banking systems;
- Member complaints regarding data inaccuracies and payment delays, as well as turnaround times.
The FSCA noted that consumers were frustrated by poor communication, website downtime, login issues, incorrect contact details, delays in payouts and high transaction fees.
Pension fund members who withdrew funds since 1 September can withdraw again from February, when the financial year ends, Buitendag said.
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