{"id":90853,"date":"2025-10-01T15:39:59","date_gmt":"2025-10-01T15:39:59","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system"},"modified":"2025-10-01T16:26:38","modified_gmt":"2025-10-01T16:26:38","slug":"south-africa-can-win-big-from-two-pot-system","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system","title":{"rendered":"South Africa Can Win Big From Two-Pot System"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>South Africa can win big from the implementation of the two-pot retirement system, with it set to benefit savers and asset managers through greater preservation of savings.<\/p>\n

As a greater share of retirement savings is preserved until maturity, South Africa can bolster its poor savings rate and the pool of funds available for investment.<\/p>\n

Ultimately, this can lead to greater fixed capital formation and faster economic growth, provided other factors such as improved sentiment and confidence in South Africa\u2019s economy fall into place.<\/p>\n

This is feedback from FNB Wealth & Investments CEO Bheki Mkhize, who outlined the potential benefits of the two-pot system and how South Africans are engaging with it a year after it was fully implemented.<\/p>\n

Mkhize said the data FNB is seeing indicates that the steady state of withdrawals is lower than expected, indicating much better financial behaviour from South Africans saving for retirement.<\/p>\n

\u201cI think it is actually lower than the expected level of withdrawals at a steady state. There are definitely pockets of concern with certain age categories, particularly those closer to retirement,\u201d Mkhize said.<\/p>\n

\u201cBut, I still do think, and I have said this before, that the data indicates the two-pot system will improve outcomes in the long run.\u201d<\/p>\n

Mkhize explained that the better outcomes are largely a result of the system forcing two-thirds of savings to be invested until maturity.<\/p>\n

In contrast, before the two-pot system came into effect, individuals who changed jobs or resigned would have to completely exit from their employer-administered retirement savings, breaking the compounding process and resulting in excessive fees.<\/p>\n

As a result, the two-pot system will result in a greater share of retirement savings being invested until maturity, expanding the pool of investable assets in South Africa.<\/p>\n

This expanding pool is vital for South Africa\u2019s economic growth over the long run, which is more of a function of fixed investment rather than consumption.<\/p>\n

Mkhize noted that other emerging markets have been extremely successful in leveraging increased retirement savings to fund infrastructure investment.<\/p>\n

However, he acknowledged that this will ultimately rely on increased confidence in the local economy and faster economic growth.<\/p>\n

Another aspect of this equation that is much more difficult to tackle is creating a culture of saving for the future, which requires increasing investment from financial services institutions in the importance of investing over the long run.<\/p>\n

Getting cash off the sidelines<\/b><\/p>\n

FNB Wealth and Investments CEO Bheki Mkhize<\/p>\n

Another issue Mkhize noted in translating increased savings into economic growth is getting cash off the sidelines and creating the confidence necessary to spur fixed investment.<\/p>\n

He pointed to data which indicates that investors are still holding a significant share of their capital in cash investments and are hesitant to deploy it in financial markets or spend it.<\/p>\n

This signals a lack of confidence in the local economy, which is replicated when looking at big corporates in South Africa.<\/p>\n

South African corporates are sitting on over R1.5 trillion in cash, which could be deployed in the local economy and significantly boost activity over the long term.<\/p>\n

\u201cI think we have a long history where corporates in South Africa tend not to want to put any of their cash at risk. They regard cash as a necessity, a backstop they need to have in place from a comfort and security perspective,\u201d Stanlib chief economist Kevin Lings said.<\/p>\n

\u201cAnd with a low level of confidence, corporates are watching their costs closely, keeping investments limited, and keeping cash handy to take advantage of opportunities when they arise.\u201d<\/p>\n

Lings explained that the main factor preventing more significant private sector investment in the local economy is a lack of confidence.<\/p>\n

Elevated policy uncertainty and an unstable political environment have continued to knock business and investor confidence in South Africa.<\/p>\n

Coupled with a stagnant local economy, which has grown at an average annual rate of 0.8% for the past decade, businesses are unwilling to invest in the local economy.<\/p>\n

\u201cSo, generally, it is a confidence thing. Confidence is a leading indicator of increased investment. Without it, funds do not flow into the local economy,\u201d Lings said.<\/p>\n

\u201cWe find around the world that in order to inspire more private sector investment, you must first get the confidence.\u201d<\/p>\n

Without confidence in the local economy and political environment, companies are unwilling to undertake long-term investment decisions.<\/p>\n

\u201cCompanies undertake a certain level of investment that is maintenance and, to a large extent, that can happen irrespective of the level of confidence,\u201d Lings said.<\/p>\n

\u201cThis is the case in South Africa. Companies are investing to keep their machinery functioning and business operating, not growing.\u201d<\/p>\n

\u201cThis is an investment you simply have to undertake in line with renewal or maintenance cycles. It is kind of business-as-usual capex.\u201d<\/p>\n

This investment is insufficient to grow the local economy meaningfully and for companies to begin creating jobs.<\/p>\n

\u201cWhat we really need in South Africa is what we call expansion capex, and that tends to be a function of confidence,\u201d Lings said.<\/p>\n

\u201cThis type of capital is unlikely to suddenly and miraculously materialise overnight, despite trillions sitting in cash.\u201d<\/p>\n

\u201cYou have to have policies in place that are going to lead to that outcome. Our view is that the best way to start that is through public-private partnerships.\u201d<\/p>\n

For More News And Analysis About South-Africa<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. South Africa can win big from the implementation of the two-pot retirement system, with it set to benefit savers and asset managers through greater preservation of savings. As a greater share of retirement savings is preserved until maturity, South Africa can bolster its poor savings rate and the pool of funds available […]<\/p>\n","protected":false},"author":84,"featured_media":90852,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,12],"tags":[275],"class_list":["post-90853","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-policy","tag-south-africa-2"],"yoast_head":"\nSouth Africa Can Win Big From Two-Pot System - South Africa<\/title>\n<meta name=\"description\" content=\"South Africa can win big from the implementation of the two-pot retirement system, with it set to benefit savers and ass ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Africa Can Win Big From Two-Pot System\" \/>\n<meta property=\"og:description\" content=\"South Africa can win big from the implementation of the two-pot retirement system, with it set to benefit savers and ass ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-10-01T15:39:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-01T16:26:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/10\/sm_1759323314.248021.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"South Africa Can Win Big From Two-Pot System\",\"datePublished\":\"2025-10-01T15:39:59+00:00\",\"dateModified\":\"2025-10-01T16:26:38+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system\"},\"wordCount\":896,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/10\/sm_1759323314.248021.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\",\"policy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-can-win-big-from-two-pot-system\",\"name\":\"South Africa Can Win Big From Two-Pot System - 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