Alexforbes has warned against misinformation on the two-pot retirement system.
In a statement, the group said as a prominent stakeholder in South Africa's retirement funding sector, Alexforbes had the responsibility of educating and empowering members to understand the intricacies of the two-pot retirement system, enabling individuals to make informed decisions regarding their savings.
"This obligation extends beyond its client base to all South Africans to ensure that members have access to reliable information so that they may balance their retirement funding goals with short-term emergency needs.
"The timing of the two-pot retirement system and access to the savings pot can be emotional. It becomes more challenging when incorrect information spreads, creating wrong expectations among members.
Alexforbes supports the implementation of the two-pot retirement system because of the positive impact it will have on the financial future of retirement fund members," it said.
According to Alexforbes, it is important to focus on a few of the critical points that members must be aware of regarding the new system:
· The implementation date is 1 September 2024.
· From 1 September 2024, any amounts saved in a retirement fund will be split into a savings component and a retirement component.
· One-third (about 33% of retirement savings) automatically goes into the savings component.
· The initial amount in the savings component will be 10% of the amount saved in the vested component, up to a maximum of R30 000.
· The minimum withdrawal amount is R2 000.
"To ensure members have access to accurate information, it is crucial to verify the factual accuracy of the information they receive. Given the complexity of retirement funding, especially with the introduction of the two-pot retirement system, there is a heightened need for simplified and accurate information.
"Having the right information empowers individuals to make informed decisions effectively and responsibly.
“Acknowledging the evolving nature of the two-pot retirement system, regular updates are provided to retirement fund members by Alexforbes. To facilitate this, the most up-to-date information related to the two-pot retirement system is available on the Alexforbes My Money Matters platform," it said.
The company said accessing accurate information safeguards the financial well-being of members and enhances confidence in the retirement funding system.
"Therefore, Alexforbes encourages all retirement fund members to seek accurate information from reliable sources, and obtain advice from an accredited adviser to understand the implications of their choices. By doing so, disillusionment and frustration among members can be prevented," it said.
PERSONAL FINANCE