August 2022
01Aug

South Africa’s Treasury Drafts Plan to Lift Retirement Savings

South Africa’s National Treasury has published draft reforms aimed at encouraging citizens to have easily accessible savings, while also ringfencing funds meant for retirement. The so-called two-pot system will allow individuals to contribute one-third of savings into an account that can be accessible at any time, while two-thirds must only become available at retirement. Read also South Africa. Two-pot system will not make any pension savings immediately available “The two-pot system option will present a better balance between ensuring preservation of retirement...

August 1, 2022
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April 2022
19Apr

Chile’s lower house votes on dueling pension withdrawal bills

Chile’s lower house will debate and vote on two proposals for early withdrawal of pensions on Monday, one by legislators and another by President Gabriel Boric, who is seeking to juggle inflation and populist demands. Leftist legislators are proposing a 10% withdrawal but Boric and Finance Minister Mario Marcel have said it would worsen spiraling inflation. In March, Chile reported its highest monthly inflation rate – 1.9% – since 1993. According to the government, Boric’s plan represents a fifth of the...

April 19, 2022
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18Apr

US. The age for required withdrawals from retirement accounts could go higher. Here’s who would benefit

Required minimum distributions, or RMDs, are amounts that must be withdrawn annually from qualified retirement savings accounts. If the RMD age is raised to 75 from 72, it would provide more time to move assets to a Roth individual retirement account, which comes with no RMDs during the owner’s lifetime. There are some instances when you may not want to convert money from a traditional 401(k) plan or IRA to a Roth. Some future retirees could end up getting...

April 18, 2022
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March 2022
18Mar

A Sustainable, Variable Lifetime Retirement Income Solution for the Chilean Pension System

By Olga Fuentes, Richard K. Fullmer & Manuel Enrique Garcia Huitron There is a need in pension systems to significantly improve the level and stability of pension payments as pensioners age. Solutions to address increased longevity and longevity risk should be not limited to increasing the take-up rate of annuities – explicit guarantees are costly in a low-interest rate environment, and lock-in of savings may not be in line with members' preferences. Our proposal is to develop a Sustainable, Variable...

March 18, 2022
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January 2022
04Jan

South Africa. Allowing withdrawals from pension funds to increase retirement savings

To allow limited withdrawals from pension funds will actually help people to save more for their retirement, according to a study by National Treasury. The research found that people sometimes resign from their jobs for the sole reason of accessing their pension fund in emergencies, and end up spending everything. The proposal to split retirement funds into two ‘pots’ and give people access to withdraw from one is expected to solve the problem. Treasury recently published more information on this and...

January 4, 2022
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October 2021
29Oct

How Chile’s Pension System Became a Covid Piggy Bank

Chile’s love-it-or-loathe it private pension system has long served as a pillar of the nation’s capital markets. Since the pandemic hit, it’s been serving another role, that of national piggy bank. Congress has passed three bills allowing savers to withdrawal billions of dollars. It’s now considering a fourth drawdown, a move that is worrying investors, pulling both the finance ministry and the central bank into the fray. The proposal is also spurring fresh political debate ahead of November’s presidential...

October 29, 2021
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27Oct

Chile’s Fourth Run on Pension Funds Heads to Senate After Committee Approval

Chile’s Senate Constitution Committee approved a proposal for a fourth round of early pension withdrawals that would pump as much as $20 billion into one of the world’s fastest-growing economies. Read also How Chile’s Pension System Became a Covid Piggy Bank The committee voted 3 to 2 in favor of legislation on Tuesday despite growing opposition to the measure. The bill now moves to the Senate floor, where it faces difficult odds of passing. Read also Olivia Mitchell: “La persistente falta de...

October 27, 2021
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September 2021
29Sep

Chilean bill to allow for fourth pension withdrawal advances in Congress

Chile's lower congressional chamber on Tuesday approved a bill that would allow citizens to make a fourth withdrawal from their pension funds, and sent it to the Senate for a vote, despite opposition from the government. The initiative passed with 94 votes in favor, just one more than the minimum needed, while 39 lawmakers voted against and 9 abstained. Chile's government and the Central Bank have warned that passing the bill would negatively affect the economy, as Chileans further deplete funds...

September 29, 2021
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20Sep

UK. Dipping into pension could cost savers their benefits

People using pension freedoms to dip into their retirement pot at 55 could end up losing their benefits, Sir Steve Webb, partner at LCP and former pensions minister, has warned. According to Webb, as furlough schemes finish and the additional £20 on universal credit payments comes to an end, people who are over 55 and still working might become concerned about their jobs or might find themselves made redundant. This could put a strain on people's finances, and lead to them...

September 20, 2021
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08Sep

Pension withdrawals by departing Hong Kong residents hit $270 mln in second quarter

Residents leaving Hong Kong withdrew HK$2.095 billion ($270 million) from Mandatory Provident Fund (MPF) pension accounts in the second quarter, up 111.6% from the same period in 2020. A sweeping security law imposed on Hong Kong in June 2020, aimed at anything Beijing regards as subversion, secession or terrorism, prompted residents of the city to move tens of billions of dollars to other countries including Canada, where thousands hope to forge a new future. read more A total of 8,000 claims...

September 8, 2021
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