The slow South African economy may be forcing a higher rate of early retirement and, therefore, increasing the number of pensioners, according to the latest BankservAfrica Disposable Salary Index (BDSI) released on Wednesday.
It may also be a sign that more people are being retrenched and taking a lump sum, according to BankservAfrica.
For the last 14 months the number of total pension payments in SA has been steadily increasing, indicating a growth in the number of people who are retiring. This is after a decline for a period of roughly a year.
According to the BDSI report, when one looks at the total payments to people for pensions and salaries – including payments of over R100 000 per month – the total increase is 12%. This is well above the 8.7% increase for the total payments for those under R100 000.
This is due to a huge 17.1% increase in the total number of pension payments – including payments over R100 000.
Pension payments of over R100 000 is up 26.7%, which, according to the BDSI report, could be an indication of people getting a lump sum pay-out at retirement.
“Very few pensioners or salaried people would receive payments of over R100 000 per month after tax, pension and medical insurance are deducted,” states the report.
“Although inflation will help to increase the number, generally it is a very small category and unlikely to be a monthly payment for pensions.”
It states that this increase in the number of pensioners may also be a factor in the increase of the average pension payment, as new pensioners would typically have more money saved due to salary increases and not having eroded their savings as much as older people in the pension system.[Source: News24]