03 May Two-pot retirement system presents a compelling case to outsource fund administration
Apart from the current benefits of contracting employee retirement funds to specialist fund administration companies, the two-pot retirement system brings new complexities to company-managed funds.
Labour rights are enshrined in law and changes to retirement benefits should ideally involve transparent negotiations.
With this, a comprehensive and understandable communications programme to ensure that employees are aware of the changes, benefits, restrictions, processes and importantly, prudent use of the two-pot retirement system. Education and information are key to facilitating understanding and enabling the two-pot reform to achieve its best intentions.
Employers managing funds will also need to protect themselves and their employees by aligning with labour law, tax regulations, and the retirement fund industry’s standards.
With outsourced pension fund management already a sensible option for employers, the introduction of the two-pot retirement system has made outsourcing the function even more attractive and compelling.
Bianca S Moyo
Communication Senior Manager
salteb.co.za