There are initial and ongoing fees to run the new regime.
South Africa's retirement fund administrators have incurred enormous costs to prepare for the two-pot retirement system and a lot ofthe costs will be ongoing, says Vickie Lange, head of best practice at Alexforbes.
Because of the increased running costs associated with withdrawal transactions, many fund administrators and retirement funds are charging administrative fees to recoup these costs.
The administrative fees that fund administrators charge are currently being investigated by the Financial Sector Conduct Authority (FSCA), according to a report on Business Live this week.
Responding to an enquiry by Moneyweb, the FSCA said: "As part of our supervisory obligation, the FSCA is looking at the fees charged by administrators and funds in respect of the two-pot legislation.," The FSCA is anticipated to issue a report on its findings before the end of January next year.
'A material windfall'
Moneyweb understands that the FSCA sent a questionnaire to retirement funds and administrators asking them specifically about the fees they charge as well as the costs involved in readying themselves for the two-pot system.
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