Newsletter • Quarter 3 • 2021
GOVERNMENT'S short-term financial relief
The government is exploring a ‘two-bucket’ solution to address retirement fund members’ needs for long-term financial security as well as short-term financial relief.
In August this year, the National Treasury released a media statement of their intentions to enable South Africans to save for their retirement, as well as provide a solution to their immediate financial needs. In this way, the retirement fund industry can contribute to the financial resilience of members before retirement and provide financial security once a member has retired.
First bucket: long-term financial security
Members must preserve their savings and grow their money using the power of compound interest.
Members will not have access to this portion of their savings until they retire.
Many in the retirement fund industry are happy with the reforms National Treasury has already introduced to encourage the preservation of retirement savings.
Second bucket: short-term financial relief
Members may access their retirement savings for emergencies even while they are employed and are a member of the retirement fund.
In conclusion, much clarification is still needed on how the ‘two-bucket’ system would work, and any change to legislation is unlikely to apply until late 2022.
Until things change, you are still not able to access your retirement savings while you are employed by Woolworths.