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Zambia to also allow pension withdrawals

WHILE Namibia has momentarily halted legislation that will lock 75% of one’s pension until one turns 55, neighbouring Zambia has drafted a bill that allows for the partial withdrawal of benefits.

This was yesterday revealed by Zambian president Hakainde Hichilema on Twitter.

He said this law will enable employees to start investing part of their pension funds early in their working lives.

South Africa too announced it was considering allowing savers access to part of their pension on a yearly basis before they retire.

According to a Zambian daily, the assented bill provides that a beneficiary under the prescribed minimum pensionable age of 36 may claim benefits once-off under the existing fund.

The bill has also revised the penalty rate for delayed contribution payments from 20% to 10%.

South Africa’s national treasury has announced that the time is ripe for the country to move to a ‘two pot’ system for retirement savings in 2023.

This system will be engineered to split pension benefits into accessible and long-term funds that can only be accessed once a beneficiary retires.

Like in Namibia, many South Africans and Zambians resign simply to get their hands on what could be a significant amount of money in a retirement annuity for different purposes.

This normally comes at a high cost in terms of taxes, and concerns the government for reasons including that people would squander their pension money, leaving more people more dependent on the state after retirement.

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