The two-pot system, which came into effect on 1st September 2024, has raised concerns about its long-term impact on members retirement savings and highlighted the additional fees imposed by administrators.

 

Early access to funds comes at a cost to members', Business Day have reported on impact of the two-pot system as well the fees that administrators will earn. Under the two-pot system, administrators are charging a fee for each withdrawal, ranging from R175 to over R400. Business Day have also released the findings of a survey to quantify the fees being charged by the various administrators.  

 

Unclaimed benefits in South Africa are estimated to total around R90 billion. If these funds were returned to their rightful owners, they could alleviate some of the immediate financial strain on citizens without eroding their existing retirement savings. However, tracing beneficiaries and completing the administrative process to return their unclaimed benefits is complicated and incurs a standard fee of between R1 and R450. These fees are competitive, and Robin Hood ensures that even the smallest benefit amounts are paid out.

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By returning unclaimed benefits, members could reduce the need to withdraw from their current pension savings, potentially leaving them in a stronger financial position for retirement, all for a similar fee.

 

Click here to read the full Business Day report on withdrawal fees being charged by administrators.

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