DO THE MATHS !!
DISMAY, DISBELIEF, Amazement. Three words that sum up my feelings towards your experts interviewed in respect of the proposed national pension scheme. The group chief executive is definitely not the right person to ask and that “nogal” of a life insurance company that might get a slice of this cake!
The question should rather be put to the ordinary man in the street (like me). My payslip for the financial year ended February 2007 shows the following total deductions: Pension 6%; tax 22%; UIF & Group Insurance 2%, Medical Aid 9%. A total of 39% – therefore deductions prior to my take-home pay are almost 40%!
Now here comes the balancing act. I am making extra provision for retirement that totals 7%, short-term insurance is 2%, petrol is 4%, municipal accounts plus telephones plus foodstuffs are estimated at 12,5% (VAT is 2% on these three items). A bond repayment on an average house is estimated at 24%. We are heading towards 90% now. Oh, I almost forgot about the kids’ education. How much do you want to add on for that?
On paper these “ideas” might seem okay, but in practice not. I unfortunately cannot budget for a surplus! One should also remember that most of these costs are fixed. For example, I can’t channel my RA commitments into this new scheme, I’m legally bound until the age of 55. My answer to this scheme is an unequivocal no.