3 Money …
STEPS IN THE RIGHT DIRECTION FOR RETIREMENT SAVINGS
T
hree new regulations on
their accumulated savings into a
retirement savings came
sustainable retirement income.
into effect in March this
Wessels says generally retirees hope to achieve two goals when
year that affect three important
easier and cheaper for retirement
retiring from their retirement
areas of retirement saving: how
fund members to buy retirement
funds. The first is to have sufficient
your contributions are invested
income solutions that will help
monthly income to be able to meet
while you are accumulating savings
them achieve a sustainable income
their needs in retirement. The
(Regulation 37 of the Pension
for life. She says the default options
second is to provide for a death
Funds Act), how easy it is to leave
put in place by retirement funds
benefit for beneficiaries.
your savings invested when you
could consist of guaranteed life
change jobs (Regulation 38) and
annuities (including with-profit
retirement fund are allowed to take
the options you have available to
annuities), living annuities, or a
some (if a pension fund) or all (if a
combination of both.
provident fund) of their savings as
convert your retirement savings into a monthly pension for life when you retire (Regulation
Wessels says while this is the first
Individuals retiring from a
a lump sum. However, the reality is
step in what will be a long journey
that the universal need for people
39). More relevant for us is the
to enable a better later life for South
in retirement is not a lump sum
significance of Regulation 39.
Africa’s pensioners, it is certainly a
but rather an inflation-adjusted
step in the right direction.
monthly income. To provide such
Twané Wessels, a member of the Investments Committee
“The introduction of annuity
a monthly income using their
of the Actuarial Society of
strategies will go a long way in
accumulated savings, members
South Africa (ASSA), says in
assisting South Africans with the
have three choices: buy a life
terms of National Treasury’s
biggest financial decision of their
Regulation 39 of the Pension
lives, which is what to do with their
Fund Act, all retirement
hard-earned life savings when they
funds are now required by law to assist retiring members with solutions to enable them to convert
38
She says the aim is to make it
reach retirement,” notes Wessels.
SILVER DIGEST //WINTER 2019
