RETIREMENT REFORM DELAYED
The losers are the ordinary people, says Maya Fisher-French
The announcement last week that retirement reform proposals have been postponed sends a very poor message about the government’s ability to implement much-needed reform. As well as this, financial institutions have wasted significant amounts of money implementing systems to accommodate these changes.
What is sad is that the delays are largely a result of rumour and misinformation circulated by politically motivated parties. The losers are the ordinary men and women who have resigned from their jobs because of the scare tactics, along with the people who will not benefit from important improvements in the retirement industry.
Before this delay, the rules of provident and pension funds were to be aligned. This meant that people could transfer their money from a pension fund to a provident fund or vice versa when they changed employers. They would then have had a simple, costeffective way to preserve their retirement funds.
People paying administrative fees on several provident and pension preservation funds would have been able to consolidate these into a single fund and save money.
Those people closer to retirement – who were worried about not having enough retirement money – would have been able to increase their contributions to 27.5% of their salary tax-free. All this has now been delayed for at least another year, if not two.