The Democratic Alliance’s proposal to allow retirement savers to use their savings as loan guarantees would likely do more harm than good, especially at the lower end of the income scale, says Mica Townsend, business development manager at 10X Investments.
Responding to the DA’s call for comment on a Private Member’s Bill to amend the Pension Funds Act, Townsend said while the proposal might be well meaning, it was not necessarily well considered.
“The danger is that this amendment would give retirement savers another way to prioritise today’s needs at the expense of their much older – and likely more vulnerable- selves. This is highly undesirable from a public policy perspective,” she said.
The bill aims to amend the current Pension Funds Act to enable pension fund members to access up to 75% of the value of their pension fund before retirement as a guarantee for a loan. The DA