ACDP cautions against misuse of two-pot retirement system

The African Christian Democratic Party (ACDP) has cautioned against the misuse of the new two-pot retirement system, set to launch in September.

The party has urged individuals to only access their savings in genuine emergency situations.

The National Treasury designed the reform to provide limited access to funds in cases of financial hardship, without requiring individuals to leave their jobs.

ACDP Deputy President Wayne Thring says, “The two-pot system is not to be abused. Your retirement is there to secure your season of old age or your season when you have retired from work, so that you’re not a burden on the fiscus, you’re not a burden on the taxpayer, you don’t become a burden on government.”

“So, your retirement system is for that particular purpose, however, if you abuse it, if one abuses it, and then uses the retirement savings portion in the two-pot system to purchase luxury vehicles, to go on holidays, what you essentially are doing, is you are eroding the final amount that will become due to you when you actually do retire,” adds Thring.

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The South African Revenue Service (SARS) says withdrawals by retirement fund members will be taxed.