for subscribers

Bruce Cameron: When retirement funds use govt's Covid-19 moratorium to cut contributions

Share your Subscriber Article
You have 5 articles to share every month. Send this story to a friend!
Bruce Cameron (Supplied)
Bruce Cameron (Supplied)

About 40 percent of all retirement funds, including stand-alone funds sponsored by employers, umbrella funds and retirement annuities, but with the exception of Government Employees Pension Fund, have taken advantage of reducing or suspending the fund contributions as a result of the Covid-19 lockdown.

In terms of research undertaken by Sanlam, this means that retirement fund members can expect a reduction in benefits of between one and three percent at retirement. The Sanlam Benchmark Survey says the outcome for each member will depend on how long they have saved and their current age until retirement.

The younger you are the worse off you are likely to be because you lose the advantages of compounding returns. The only way to counteract this is to make more contributions in future.

There’s more to this story
Subscribe to News24 and get access to our exclusive journalism and features today.
Already a subscriber? Sign in
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Yes, and I've gotten it.
24% - 69 votes
No, I did not.
52% - 150 votes
My landlord refused
24% - 71 votes