South Africans need to save for retirement

Proposals to streamline the South African retirement system, which were outlined in a discussion document released by Finance Minister Pravin Gordhan yesterday, are encouraging from the perspective of ordinary South Africans.

Finance Minister Pravin Gordhan

“This is a very important initiative for South Africans and could go a long way to increasing the standard of living of South Africans,” says Craig Aitchison, Managing Director of OMAC Actuaries & Consultants.

“The need for South Africans to save and be prepared for retirement is crucial. We have always been concerned with the low rate of savings among South Africans so we find this progress very encouraging and continue to support efforts to reform the local retirement industry,” he says.

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Aitchison says the discussion paper targets several areas that require reform in order to address this problem. He refers to proposals such as strengthening the preservation of retirement benefits as well as the introduction of a new tax incentivised savings vehicle.

“Non-preservation has been a leading cause of many people retiring with insufficient retirement savings and a social issue that Old Mutual has always expressed concern about. We are encouraged by the proposed intensified focus on preservation,” says Aitchison.

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