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    • almost R25 billion paid so far
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    almost R25 billion paid so far

    Umito Posted on

    Since September 1, pension fund members have had access to a third of their retirement savings under the two-fund pension system.

    About 10 weeks after the implementation of the two-fund pension system, figures from fund managers indicate that pension fund members have so far withdrawn about R21 billion from their retirement savings.

    Members of government pension funds made the most withdrawals based on amount contributed, followed by AlexForbes members in second place.

    ALSO READ: Two-pot pension system: two weeks and already a few billion rands later

    Government pension fund: R9.3 billion

    Mack Lewele, director of communications and public relations at the Government Pension Administration Agency (GPAA), says the fund has received 375,553 requests from fund members who want to withdraw from their savings funds under the two-pot pension system and has finalized 343,602 (91%) of them.

    The value of these withdrawals amounts to R9.3 billion, while the amount paid to Sars in tax averaged 28% of the gross amount. Lewele could not say how many members who requested a withdrawal lost the entire amount to Sars for unpaid taxes.

    The largest amount paid to a single member was R30,000 before tax, while some received R0 due to tax owed to Sars.

    Lewele says the fund did not ask members what will they use the money for. The GPAA experienced no delays or problems in processing applications, except for those involving divorce and when members wanted the money paid into a new bank account.

    ALSO READ: Two-pot pension system: R21.4 billion paid out so far – Sars

    AlexForbes: R6 billion

    Vickie Lange, head of research, best practices and academy at AlexForbes, says the fund manager has received more than 314,000 requests for savings under the two-fund pension scheme, totaling of more than R6 billion, of which 96% has been paid.

    ALSO READ: Two-pot pension system: nothing for thousands of pension fund contributors

    Former mutual: R3.2 billion

    Michelle Acton, head of retirement reform at Old Mutual Corporate, says Old Mutual has received 263,312 withdrawal requests since September 1 and has finalized 248,812 worth R3.2 billion, including taxes paid to Sars which amounted to R920 million.

    About 1,000 members received no money due to unpaid taxes. Maximum payments were approximately R30 000, with the initial allocation capped at R30 000. The smallest amount paid was R2 000 before administrative costs and taxes were deducted.

    The top income groups who withdrew the most from their savings funds under the two-pot pension system were those earning between R5,000 and R9,999 per month (32.35%), between R10,000 and R14,999 per month (17.51%), between R15 and R15,000 and R19,999 per month (15.66%) and between 20,000 and 29,999 R (13.79%).

    When it comes to age groups, most withdrawals were among people aged 31-35 (18.36%), 36-40 (23.18%), 40-45 (20.71%). ) and 46 and 50 years old (15.28%). Acton says that according to an Old Mutual survey, members indicated they withdrew the money for debt management and primarily for health emergencies.

    ALSO READ: Two-pot pension system: impact on investors, markets and the South African economy

    Sanlam Corporate: R2.3 billion

    Sanlam Corporate has so far received 130,398 withdrawal requests under the two-pot pension system and finalized 123,714 worth R2.3 billion including tax. Taxes on the claims amounted to R573.7 million, while members who withdrew had to pay a tax debt of R54.7 million.

    In total, 1,731 members did not receive any money because all of their debts went to Sars for tax debt. The highest gross amount paid to a single member was R61,689, while the lowest was R2,000.

    At Sanlam Corporate, most members who withdrew from their savings funds were aged between 36 and 45 and in the salary bracket between R0 and R370 500. People did not indicate what they wanted use this money.

    ALSO READ: Two-pot retirement system: how to resist the temptation to withdraw

    Dynamic: R3.5 billion

    Johann van Tonder, an economist and researcher at Momentum Group, says Momentum received 206,761 requests between September 1 and November 7, but 13,275 requests were canceled or were duplicate requests, leaving 193,486 valid requests.

    To date, Momentum has settled 177,998 (92%) valid claims. The value of valid claims was R3.5 billion, of which R3.3 billion (or 93%) was paid to both customers and Sars.

    Van Tonder claims 20.7% of the total amount paid went to Sars, with customers receiving 79.3%. “However, it should be noted that Sars changed its system to treat taxes differently at the end of September. From September 1 to the end of September, Sars used the taxable income provided by the client to calculate the tax deduction and in many cases the claimants specified that it was R0.

    “As a result, no tax was deducted from the claim, but these claimants now have a tax debt with Sars which will need to be settled when they file their tax return. Sars changed its process at the end of September to use the taxable income specified by the customer during the claims process, or the taxable income in Sars’s own records, whichever is greater.

    Up to November 7, 2,973 (1.5% of all valid claims) had received an R0 because they owed money to Sars.

    According to Van Tonder, many people claimed more than R30,000 and the largest claim received was for R95,000. The smallest claim was R1,433. Momentum also has no guidance on what people want to use the money for.

    ALSO READ: Two-pot retirement system: not a miracle solution for financial freedom

    NMG benefits: R840 million

    Siphamandla Buthelezi, head of platforms at NMG Benefits, says the fund manager has received almost 42,000 applications so far, of which 38,000 have been successfully processed and paid out to members. “This means that NMG has processed more claims in volume than it normally would have done in four years.”

    Of the total applications received so far under the two-pot pension scheme, 18,000 were from walk-in members who visited one of the NMG offices across the country to submit a withdrawal . The total amount requested was R840 million, based on the total number of claims received, an average of R20 500 for each claim.

    The 38 000 claims paid so far represent a net payment of R538 million, with the R180 million being returned to Sars as tax. The highest amount paid to an individual member is approximately R24 000 and the lowest amount, R0, owed to the claimant who owes money to Sars. A total of 666 members have not received any payments due to back taxes.

    Umito
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