Should we be concerned about proposals for a new state pension scheme?
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While 10X welcomes anything that advances the discussion on the topic of South Africans preparing financially for their old age, the furore in the media this week about the “proposed compulsory state pension system” is just renewed speculation about a policy that has been under discussion for many years, said Chris Eddy, Head of Investments at 10X Investments.
Eddy pointed to a statement by the Treasury deputy director-general Ismail Momoniat that the proposals were neither government nor Treasury policy. Rather, he said, they reflected the aspirations of some of the constituents at the National Economic and Labour Council (Nedlac), about which no consensus had been reached.
After some heated coverage in the media, various authorities on the matter, including Momoniat, have made statements making it clear that the Green Paper on Comprehensive Social Security and Retirement Reform, published by the Minister of Social Development Lindiwe Zulu this week rehashes proposals that have been on the table for many years.
“We will continue to keep a close eye on any developments in this area and will alert clients should any change be under serious consideration,” said Eddy.
“In the meantime, the worst possible outcome would be for retirement savers to be distracted from their purpose of controlling the things they can in their mission to set themselves up for a decent retirement.”
Eddy added that South Africans would be better off saving consistently, investing sensibly and keeping an eye on the fees they are paying rather than worrying about the discussion over a state pension scheme that is revisited every so often.