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About 10 weeks since the two-pot retirement system was implemented, figures from fund managers indicate that pension fund members have withdrawn about R21 billion so far from their retirement savings.
Government pension fund members made the most withdrawals based on the amount paid out, with members with AlexForbes in second place.
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Mack Lewele, director of communications and public relations at the Government Pensions Administration Agency (GPAA), says the fund received 375 553 requests from fund members who want to withdraw from their savings pots under the two-pot retirement system and finalised 343 602 (91%) of them.
The value of these withdrawals is an eye-watering R9.3 billion, while the amount that went to Sars for tax was an average of 28% of the gross amount. Lewele could not say how many members who requested a withdrawal forfeited the whole amount to Sars for unpaid taxes.
The biggest amount paid out to a single member was R30 000 before tax, while some received R0 due to tax owing to Sars.
Lewele says the fund did not ask members what they will use the money for. The GPAA did not experience any delays or problems in finalising claims, except those involving divorce and when members wanted to have the money paid into a new bank account.
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Vickie Lange, head of research, best practice and Academy at AlexForbes, says the fund manager received more than 314 000 savings pot claims under the two-pot retirement system to a total value of over R6 billion, of which 96% has been paid.
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Michelle Acton, Retirement Reform Executive at Old Mutual Corporate, says Old Mutual received 263 312 withdrawal claims since 1 September and finalised 248 812 to the value of R3.2 billion, including tax paid to Sars that amounted to R920 million.
Approximately 1 000 members received no money due to outstanding taxes. The maximum payouts were just about R30 000 as the initial allocation was capped at R30 000. The smallest amount paid out was R2 000 before administration fees and tax were deducted.
The major income groups that withdrew the most from their savings pots under the two-pot retirement system were those earning between R5 000 and R9 999 per month (32.35%), between R10 000 and R14 999 per month (17.51%), between R15 000 and R19 999 per month (15.66%) and between R20 000 and R29 999 (13.79%).
When it came to age groups, most of the withdrawals were from people between the ages of 31 and 35 (18.36%), 36 and 40 (23.18%), 40 and 45 (20.71%) and 46 and 50 (15.28%). Acton says according to an Old Mutual dipstick survey, members indicated they withdrew the money for debt management and mainly health emergencies.
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Sanlam Corporate has so far received 130 398 withdrawal claims under the two-pot retirement system and finalised 123 714 to the value of R2.3 billion including tax. Tax on claims amounted to R573.7 million, while members’ who withdrew had to pay tax debt of R54.7 million.
A total of 1 731 members did not receive any money because their entire claims went to Sars for tax debt. The biggest gross amount paid out to a single member was R61 689, while the smallest amount paid out was R2 000.
At Sanlam Corporate most of the members who withdrew from their savings pots were between 36 to 45 years old and were in the salary bracket between R0 and R370 500. People did not indicate what they want to use the money for.
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Johann van Tonder, economist and researcher at the Momentum Group, says Momentum received 206 761 claims between 1 September and 7 November, but 13 275 claims were either cancelled or were duplicate claims, leaving 193 486 valid claims.
So far Momentum has paid 177 998 (92%) valid claims. The value of the valid claims amounted to R3.5 billion, of which R3.3 billion (or 93%) was paid to both clients and Sars.
Van Tonder says 20.7% of the total paid amount went to Sars, with clients receiving 79.3%. “However, it is worth noting that Sars changed its system to process tax differently at the end of September. From 1 September to the end of September Sars used the taxable income specified by the client to calculate the tax deduction and in many cases the claimants specified that it was R0.
“Consequently, no tax was deducted from the claim, but these claimants now have a tax debt at Sars which will have to be paid when they file their tax returns. Sars changed its process at the end of September to use the higher of a taxable income specified by the client in the claim process or the taxable income on Sars’ own records.”
Up to 7 November 2 973 (1.5% of all valid claims) claimants received R0 because they owed Sars money.
According to Van Tonder many people claimed more than R30 000 and the largest claim received was for R95 000. The smallest claim amounted to R1 433. Momentum also has no indication of what people want to use the money for.
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Siphamandla Buthelezi, head of platforms at NMG Benefits, says the fund manager received close to 42 000 claims so far, with 38 000 successfully processed and paid out to members. “This means NMG processed more claims in volumes than what it would normally do in four years.”
Out of the total claims under the two-pot retirement system received so far, 18 000 were from walk-in members who visited one of the NMG offices around the country to submit a withdrawal. The total amount requested amounted to R840 million, which is based on the total number of claims received, resulting in an average of R20 500 for each claim.
The 38 000 claims paid so far amounted to a net payment of R538 million, with the R180 million going to Sars for tax. The greatest sum paid to an individual member is approximately R24 000 and the lowest amount R0 due to the claimant owing Sars money. A total of 666 members received no payment due to arrears taxes.
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