PROFILE
More competition
will be promoted
by allowing
providers other
than life offices to
sell living annuities.
of how government will implement the so-called twin-peaks
regulatory policy framework. The framework, first announced more
than a year ago, is aimed at separating the prudential regulatory
functions of the Reserve Bank from market conduct responsibilities
which will be assigned to a more strengthened Financial Services
Board (FSB).
However, the Minister proposed a raft of measures aimed at
encouraging savings and strengthening the retirement sector.
Among these were proposals to introduce tax-preferred savings
and investment accounts in 2015, and to ensure retirement funds
identify appropriate preservation funds for exiting members who
will be encouraged to preserve when changing jobs.
‘Retirement funds will be required to guide their members
through the process of converting savings into a regular income
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BANKER SA
Edition 5
after retirement, and to choose or establish default annuity products
that meet appropriate principles and standards,’ says Gordhan.
‘More competition will be promoted by allowing providers other
than life offices to sell living annuities,’ he adds.
The Minister says government is also looking at ways of how
to encourage all employers to provide appropriate retirement
mechanisms for their employees as part of the broader social
security reforms.
Tshabalala says the announcement that tax-preferred savings and
investment accounts will be introduced in 2015 is pleasing for two
reasons. Firstly, he says, the economy as a whole will benefit from
the higher rate of savings that is likely to induce. Secondly, banks
are likely to find it somewhat easier to address the stable liquidity
challenge created by Basel III.