Two-pot Implementation To Increase By R300 Million Annually: Fsca

The Financial Sector Conduct Authority FSCA has projected that the cost of implementing the two-pot retirement system will rise by an additional R300 million annually. This follows the system's implementation on September 1, with total costs since its introduction amounting to R1.6 billion.

The FSCA clarified that this significant cost includes several factors such as system changes, the hiring of additional staff to handle queries, the establishment of new call centres, and the extensive communication and educational efforts required to inform and educate members about the new system.

FSCA Deputy Commissioner Astrid Ludin presented this update to Parliaments Standing Committee on Finance, explaining that much of the initial R1.6 billion expense was due to system changes by large administrators who had to invest heavily in modifying their infrastructure to accommodate the two-pot system. The increased costs also reflect the need for member communication and education to ensure smooth transitions and understanding of the new retirement savings approach.