The five years leading up to retirement are among the most critical in shaping long-term financial security and emotional well-being. During this period, individuals must navigate a complex set of financial and personal decisions.

Strengthening Your Financial Position

The key concern is ensuring that savings last throughout retirement. With people living longer, longevity risk, which is the danger of outliving one’s savings, is top of mind. This is compounded by inflation which steadily erodes purchasing power and market volatility, in particular, sequence-of-returns risk, where a significant market downturn in the years immediately before or after retirement can cause long-lasting effects on savings. Adjusting your investment strategy to balance protection and growth becomes a critical and often complex decision.

Healthcare costs such as medical aid, gap cover, and long-term care often increase at a higher rate than general inflation and are frequently underestimated. Preparing for potential chronic conditions or frail care needs is essential to avoid prematurely depleting savings.

Decisions around withdrawal rates and retirement products are equally crucial. Drawing too much income too soon can exhaust capital, while the choice between a guaranteed annuity and a living annuity requires careful assessment of risk tolerance, flexibility needs, and legacy goals. A guaranteed annuity offers a secure, predictable income for life but lacks flexibility and the ability to leave a legacy, while a living annuity provides control over investments, flexible withdrawals, and potential for growth that can be passed to beneficiaries but carries market risk. A hybrid approach that combines both can often strike a balance between security and growth.

Tax planning also plays a vital role. Drawing income from multiple sources, such as pension funds, annuities, or investments, requires understanding how each is taxed to prevent unnecessary erosion of income.

In this critical five-year window, individuals should:

• Reassess investment risk and rebalance portfolios.
• Eliminate high-interest debt.
• Finalise housing and healthcare arrangements.
• Seek professional financial advice to integrate these elements into a cohesive plan.

Reimagining Your Lifestyle, Purpose, and Routine

Retirement also brings significant emotional and lifestyle shifts. Many people underestimate the loss of structure, purpose, and social connection that comes with leaving the workforce. Work often provides identity, community, and routine; its absence can lead to isolation or loss of fulfilment.

To manage this, it’s important to plan intentionally for the psychological transition. Establishing new routines, pursuing hobbies, engaging in volunteer work, or part-time activities can help restore purpose and connection. Decisions around housing and lifestyle such as downsizing or moving to a retirement community, should also be made thoughtfully, considering both emotional and financial factors.

The final years before retirement are key to shaping your new chapter. Taking a proactive, holistic approach addressing both financial and non-financial aspects helps ensure that the next phase of life is not only secure but also deeply rewarding.

World Mental Health Day is observed each year in October, serving as a global reminder of the importance of mental wellbeing in all its dimensions— emotional, physical, social, and financial. While mental health discussions often focus on emotional support and clinical care, an equally important consideration is how our state of mind influences the way we plan, save, and prepare for the future.

Within the employee benefits environment, much of the focus is on financial literacy, long-term planning, and helping members achieve their retirement goals. However, even the most well-structured financial plan depends on how individuals feel, think, and respond to life’s pressures. When stress, anxiety, or uncertainty are not effectively managed, they can impact motivation and decision-making, often leading to short-term financial choices that compromise future security.

Across South Africa, many households are dealing with financial strain caused by rising living costs, economic uncertainty, and the ongoing effects of the pandemic. These pressures can influence behaviour, such as pausing retirement contributions, dipping into savings, or relying on credit, often as a way of coping with immediate needs. While understandable, these choices can make it harder to attain long-term financial stability.

Equally, financial security can contribute to better mental well-being. Having a clear view of one’s financial goals, knowing that retirement savings are on track, or maintaining an emergency fund can ease daily stress and provide a greater sense of control. This creates a positive cycle, improved mental well-being supports sound financial habits, and responsible financial behaviour strengthens emotional resilience.

It’s important to remember that mental health challenges are deeply personal, and professional support should always be sought when needed.

To build resilience in both areas, small, consistent actions can make a significant difference:

• Set clear goals: Define your retirement objectives to stay focused and reduce uncertainty.
• Be consistent: Even modest, regular contributions build long-term security and peace of mind.
• Manage debt: Reducing debt can ease financial strain and support better mental well-being.
• Use available support: Employers may provide access to Employee Assistance Programmes (EAPs), offering confidential counselling and wellbeing support. These initiatives work hand in hand with financial wellness programmes, helping you strengthen both emotional and financial confidence. Organisations such as the South African Depression and Anxiety Group (SADAG) offer accessible counselling.
• Stay active and connected: Social and physical engagement, as well as staying informed can help maintain balance and perspective.

Ultimately, financial security and mental well-being are interconnected. A calm and confident mindset supports better financial decisions, while sound financial planning reduces stress and anxiety about the future. Achieving both creates a foundation for lasting stability, proving that true wealth lies not only in financial security, but in peace of mind.

South Africa’s healthcare system is under pressure: staff shortages, rising costs, and uneven access between public and private care. To ease these challenges, government and healthcare leaders are turning to innovation, and Artificial Intelligence (AI) is emerging as a powerful tool.

AI isn’t science fiction. It’s already reshaping healthcare worldwide, helping doctors make faster, more accurate decisions and giving patients better outcomes. With the right safeguards, it could transform healthcare access in South Africa too.

Where AI Can Help

• Smarter diagnosis: AI can already outperform specialists in reading certain scans, leading to earlier detection and less invasive, more cost-effective treatments.
• Personalised care: By tailoring treatment plans, AI complements traditional methods and improves patient outcomes.
• Lighter admin load: Automated systems cut paperwork, freeing up doctors and nurses to focus on patients.
• Better access: AI helps allocate scarce resources where they’re needed most, reducing waste and improving efficiency.

South Africa’s Early Use Of AI In Healthcare

AI is already at work here:

• Chest x-ray software is supporting TB detection in public hospitals.
• Rural clinics use AI chatbots in local languages to triage patients.
• WhatsApp bots and pilot programmes are providing counselling, HIV risk checks, and health education to thousands in underserved communities.

At a recent national roundtable, government committed to making AI part of its 10-year health strategy, with a focus on preventative care. The message: AI must support, not replace, the human side of healthcare.

Keeping It Safe

AI brings risks, from biased datasets to privacy concerns. That’s why South Africa’s new National AI Policy Framework calls for:

• Transparent and fair training of AI models.
• Independent evaluation of systems before use in clinics.
• Stronger data privacy and accountability.

AI will never replace the empathy and judgement of healthcare professionals. But used wisely, it can give them better tools, lighten their load, and help more South Africans access the care they need.

Unclaimed benefits funds are money owed to members of retirement funds or their beneficiaries that have not yet been paid out, as they were never claimed. South Africa’s financial institutions hold an estimated R89 billion in unclaimed benefits assets. Although the South African retirement fund sector has made commendable progress in addressing this widespread issue, the lack of a comprehensive and consistent approach to unclaimed financial assets led the Financial Sector Conduct Authority (FSCA) to consider measures to address the challenges related to these unclaimed assets.

Why Are Assets Unclaimed?

Many people are unaware that they are entitled to certain assets or payouts, and some may simply forget to claim them. Additionally, a beneficiary’s contact information might be outdated, or the beneficiary may have passed away without informing their family about the funds.

Other challenges include poor administration and record-keeping, as well as difficulties faced by foreigners seeking to claim benefits after leaving the country. Beneficiaries may also lack the necessary documents to verify their identity or their relationship to the original beneficiary.

Neglecting to claim your assets can result in missing out on money that could provide immediate financial relief, help pay off debt, contribute to savings goals, or strengthen your retirement security.

Moreover, leaving assets unclaimed for an extended period may result in a decline in their value due to poor investment performance. Additionally, the administrative costs incurred by financial institutions for record-keeping, storage, and legal fees can further reduce the value of your assets.

How Do Benefits Become “Unclaimed”?

A retirement fund benefit becomes unclaimed when:

• It’s due and payable to a member or beneficiary (withdrawal, retirement, retrenchment, or death benefit), but it hasn’t been paid out.
• The payment has been outstanding for 24 months or more.

What Happens to the Money?

• After 24 months, the benefit is moved from the original retirement fund into a registered Unclaimed Benefit Fund (UBF).
• The UBF preserves the money until it is claimed.
• The money continues to earn investment returns (usually low-risk returns), and it remains the rightful property of the member or their beneficiaries.

Tracing Efforts

By law, the retirement fund or Unclaimed Benefits Funds must:

• Try to contact the member or beneficiaries using the contact details on record.
• Use tracing agents, employer records, and public databases to locate them.
• Keep records of all tracing attempts in case the claim is made later.

How Can a Person Check if They Have Unclaimed Benefits?

You can search in three main ways:

1. FSCA Unclaimed Benefits Search Portal
   Go to https://www.fsca.co.za.
   Enter your ID number or full name.
   The system will list any funds that may hold benefits in your name.
2. Contact the fund or administrator directly
   If you remember the name of your old retirement fund, call them and ask if they have an unclaimed benefit for you.
3. Check through old employers
   HR or payroll may still have your fund membership details.

How to Claim Unclaimed Benefits

• Complete the claim form from the relevant fund or Unclaimed Benefit Fund.
• Provide certified copies of your ID, proof of address, and any other supporting documents (e.g. death certificate if claiming as a beneficiary).
• The administrator will verify your details and pay the money into your bank account.

Below are some key components which have been identified to raise awareness around unclaimed benefits funds:

Member Awareness

• Many members leave jobs, withdraw early, or pass away without informing their families of their benefits. Members are encouraged to keep personal information, beneficiaries, and contact details up to date helps prevent benefits from becoming lost.

Family/Beneficiary Knowledge

• Dependants are often unaware of potential entitlements. Outreach programmes (community sessions, schools, local radio) help families know where to check for unclaimed benefits.

Trust and Transparency

• Clear, simple communication about how to trace and claim funds prevents fraud and builds trust in retirement funds. This helps dispel myths (e.g. that it’s too difficult, or that funds automatically “disappear”).

Financial Literacy

• Raising awareness on how retirement funds work and the importance of preservation when changing jobs reduces the chance of future unclaimed benefits. This can be directly linked to broader financial education elements. (budgeting, savings, retirement planning).

Technology and Accessibility

• Awareness about online search portals (e.g., FSCA’s Unclaimed Benefits Search Engine) or fund administrators’ tracing services is vital. Many people in disadvantaged communities aren’t aware that these tools exist, reinforcing the need for outreach programs through multi-communication platforms.

Employer/Trustee Responsibility

• Employers and fund trustees play a big role by educating staff before exit, retrenchment, or retirement. Exit counselling should always include information on how benefits are managed, preserved, or claimed.

Important Considerations

It is essential to maintain current contact information and beneficiary details with financial institutions and retirement funds to prevent your assets from becoming unclaimed. Additionally, members should stay vigilant against cyber-attacks, phishing emails, and scammers.

Having spent the early years of my working career as an Educator, I was alarmed to read that of the 1.2 million children who enrolled in Grade 1 in South Africa in 2013, only 740 876 of these learners matriculated in 2024. That means only 60% (2023: 68%) of those learners who started Grade 1 in 2013 completed their schooling.

A further disturbing statistic is that between Grade 10 and Grade 12, the class of 2024 shrank by a whopping 407,561 learners, which is a dropout rate of 35,5%.

Considering the statistics above, I was interested to read about the Basic Education Laws Amendment (BELA) Act, passed into law by President Cyril Ramaphosa on 13 September 2024, marking one of the most significant legislative reforms in education since democracy. The Act amends previous legislation and aims to improve governance, language policy management, and learner access, while addressing long-standing challenges in the public education system. The Act has introduced some progressive elements, while also sparking intense public and political debate, especially concerning school governance and parental rights, resulting in Sections 4 and 5 initially being postponed for further discussions.

Following further dialogue, Ramaphosa announced on 20 December 2024 that an agreement had been reached, and he signed a Presidential Proclamation to give effect to the Act that day.

Key Provisions of the BELA Act

• Language Policy Control: Shifts final decision-making on a public school’s language policy from the school governing body (SGB) to the provincial Head of Department (HOD).
• Admission Authority: Gives the provincial HOD the final decision in learner admissions at public schools.
• Grade R Compulsory: Makes Grade R (reception year) compulsory, expanding the formal schooling system from Grade R to Grade 12.
• Home Schooling Regulation: Tightens regulations on home education, requiring formal registration and curriculum alignment.
• Corporal Punishment: Reinforces the ban on corporal punishment with stricter enforcement mechanisms.
• School Governance Adjustments: Modifies the composition and powers of school governing bodies.
• Compulsory Attendance Enforcement: Introduces penalties for parents who fail to ensure school attendance of their children.

Strengths of the BELA Act

• Universal Access through Grade R Inclusion: Making Grade R compulsory is a transformative step that strengthens the foundation phase.
• Enhanced Accountability in Language and Admissions: The transfer of authority from the SGB to provincial departments aims to eliminate discriminatory practices and gatekeeping by schools. This may improve equity and inclusivity.
• Clarity on Home Schooling Standards: Through regulating curriculum standards and monitoring compliance, the Act seeks to ensure home-schooled learners receive an education equivalent to formal schooling.
• Human Rights-Based Approach: Strengthening the ban on corporal punishment and reinforcing learner protections aligns with the Constitution and global best practices in child rights.
• Improved Learner Attendance Enforcement: The emphasis on compulsory attendance, with possible sanctions for parents, highlights the state’s commitment to universal education.

Criticism of the BELA Act

• Undermining School Governing Bodies
  Critics argue the Act centralises a high level of power in the hands of the state, particularly provincial HOD. This may erode the principle of participatory democracy in education and reduce community ownership of schools.
• Threat to Mother-Tongue Education
  The Act may compromise the preservation of indigenous languages in schools that currently use them as mediums of instruction.
• Administrative Overreach in Home Education
  Homeschooling communities argue that the regulatory requirements are burdensome and may stifle educational freedom and innovation.
• Capacity Constraints at Provincial Level
  Shifting major responsibilities to education departments assumes strong administrative capacity.
• Vague Implementation Frameworks
  Several provisions are without clear guidelines for enforcement. For example, it is unclear how provinces will scale up infrastructure and staffing to accommodate the compulsory Grade R inclusion.

The BELA Act is widely regarded as a bold legislative attempt to modernise South Africa’s education system, improve inclusivity, and uphold learners’ rights, seeking to address real inequities and inefficiencies.

At a time when South Africa needs urgent reforms to improve education levels and skills, and increase the percentage of learners completing their basic education (Grades R-12), to ensure the nation remains economically relevant and can drive economic growth, we hope these legislative changes will lead to the desired outcomes.

Behavioural biases refer to systematic errors in thinking that unconsciously influence our judgement and shape our understanding of the information around us, ultimately affecting our decision-making processes. These biases often lead to irrational outcomes, diverting individuals from logical patterns of thought. While traditional finance assumes that individuals act rationally and base decisions solely on available data, behavioural finance acknowledges the profound influence of emotions, biases, and irrational behaviours on financial choices.

This article explores some of the common behavioural biases and their impact on pension savings and retirement planning.

1. Present Bias

Present bias is the tendency to prioritise immediate rewards over long-term benefits. This inclination for instant gratification often leads individuals to prioritise short-term desires over long-term financial goals, such as pension savings. For example, instead of setting aside funds for a distant retirement, a person may choose to spend on luxuries or entertainment in the present.
This bias makes it difficult to maintain a disciplined savings plan, creating a significant barrier to building a secure pension fund. Over time, the consistent failure to save can significantly impact an individual’s retirement prospects, leaving them financially unprepared for the future.

2. Overconfidence

Overconfidence is the tendency to overestimate one’s ability to manage investments or make sound financial decisions. This bias can manifest in various ways, such as taking on excessive risks, misjudging market timing, or ignoring professional advice.

When it comes to retirement planning, overconfidence can result in overlooking potential risks or underestimating the effects of market downturns. As a result, individuals may compromise their financial security in retirement and find themselves vulnerable to unforeseen economic challenges. Recognising the limits of one’s expertise and seeking professional guidance can help mitigate the adverse effects of overconfidence.

3. Herd Mentality

Herd mentality occurs when individuals mimic the behaviour of others without conducting their own research or considering their personal circumstances. This often leads to decisions driven by trends or popular opinion, rather than aligning with individual financial goals or risk appetite.

While it may seem safer to follow the crowd, this approach can result in unsuitable investments or strategies. For example, blindly investing in a trending asset might expose an individual to risks they are ill-equipped to manage, thereby endangering their pension savings.

4. Loss Aversion

Loss aversion refers to the tendency to fear losses more than one values equivalent gains. This bias often leads to overly cautious financial behaviour, as individuals seek to avoid potential losses at all costs.

This can result in excessively conservative investment choices that limit growth potential in retirement planning. While it is important to protect pension savings, too much caution can hinder the returns needed to meet retirement objectives. Striking a balance between risk and reward is key to long-term financial success.

Addressing Behavioural Biases

Recognising and addressing behavioural biases is a vital step in improving retirement outcomes. Consider the following strategies:

• Awareness: Educate yourself about common biases and reflect on how they may influence your financial decisions.
• Professional Guidance: Work with a financial adviser who can offer objective insight and help create a balanced retirement plan.
• Automation: If you’re not currently contributing to a pension scheme, consider setting up automatic contributions to help overcome present bias and ensure consistent savings. If you are already saving, think about increasing your contributions annually. For example, when you receive a salary increase, you could allocate a portion—say 1% of a 6% increase towards your pension. Over time, this can significantly boost your retirement savings, while also offering potential tax benefits.
• Diversification: Spread your investments across different asset classes to reduce the risks associated with herd mentality and loss aversion.
• Review and Adjust: Regularly review your financial strategies to ensure they remain aligned with your long-term goals and risk tolerance.

Behavioural biases are a natural part of human decision-making, yet they can significantly impact financial outcomes. By recognising and addressing these biases, individuals can make more informed choices that support better retirement planning. Taking a proactive approach not only reduces the influence of these unconscious patterns but also contributes to a more stable and secure financial future.

Book Recommendation: The Psychology of Money – Morgan Housel

“In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics.”

In the current digital landscape, cybersecurity and cyber resilience concerns have become critical for businesses across various sectors, particularly the financial industry. The increasing complexity and prevalence of cyber threats pose significant risks to financial organisations, jeopardising sensitive information, disrupting operations, and undermining customer confidence. The Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) have issued Joint Standard 2 of 2024, outlining the cybersecurity and cyber resilience obligations for financial institutions in South Africa. This standard will take effect on June 1, 2025. It will apply to certain financial entities at this time, including banks, insurers, stock exchanges, retirement funds, and investment fund administrators, and they will have one year from this date to achieve full compliance with the requirements set out in the Joint Standard 2. This Joint Standard establishes the foundational standards for adopting best practices and procedures to identify and mitigate cybersecurity threats.

Understanding Cybersecurity and Cyber Resilience

Cybersecurity involves the practices, technologies, and processes to safeguard digital information, networks, and systems against unauthorised access, use, disclosure, disruption, modification, or destruction. In contrast, cyber resilience refers to an organisation’s capability to anticipate, endure, and recover from cyber threats, ensuring operational continuity while minimising the effects of security breaches. While cybersecurity focuses on preventing threats, cyber resilience emphasises responding to and recovering from them.

Achieving effective cybersecurity and cyber resilience necessitates a holistic approach that incorporates multiple layers of defence alongside various strategies and technologies. This includes deploying strong security controls like firewalls and encryption, formulating incident response plans, and conducting regular risk assessments. Financial organisations can protect their assets, data, and customers by emphasising cybersecurity and cyber resilience while ensuring compliance with regulations and mitigating the financial and reputational risks associated with security breaches.

The Six Pillars of Cybersecurity

Joint Standard 2 delineates the requirements for effective cybersecurity practices, ensuring that financial institutions are prepared for cyber threats and are capable of responding and recovering efficiently. The standard identifies six essential pillars of cybersecurity, which provide a solid framework for managing and decreasing cybersecurity risks:

1. Identification: Understand the organisation’s critical assets, data, and systems while identifying potential cybersecurity risks and threats.
2. Protection: Implement protective measures, including security controls, firewalls, encryption, and access management, to deter or prevent cyber threats.
3. Detection: Focus on real-time detection and identification of cyber threats using tools like intrusion detection systems and security information and event management (SIEM) systems.
4. Response: Contain, eradicate, and recover from security incidents upon detecting cyber threats.
5. Recovery: Restore systems, data, and services after a security incident while instituting measures to prevent future occurrences.
6. Governance: Establish and maintain a cybersecurity program that includes policies.

Best Practices for Cybersecurity and Cyber Resilience

To enhance cybersecurity and cyber resilience, financial organisations should consider the following practices:

1. Enforce Strong Passwords: Utilise complex, unique passwords for all accounts and implement multi-factor authentication where possible.
2. Regular Software Updates: Consistently update operating systems, applications, and firmware to address vulnerabilities.
3. Install Anti-Virus Software: Use and frequently update anti-virus software to identify and eliminate malware.
4. Enable Firewalls: Activate firewalls to prevent unauthorised access to networks.
5. Utilise Encryption: Encrypt sensitive data both in transit and at rest.
6. Limit Access: Employ least privilege access controls to restrict user access to sensitive information.
7. Monitor Systems: Regularly check systems for suspicious activity and respond promptly to incidents.
8. Data Backup: Frequently back up critical data to mitigate losses from an attack.

Best Practices for Cyber Resilience

1. Develop an Incident Response Plan: Create a strategy for prompt and effective action in response to cyber incidents.
2. Conduct Regular Risk Assessments: Identify and evaluate potential cyber risks to prioritise mitigation efforts.
3. Implement Business Continuity Planning: Formulate plans to sustain business operations during and following a cyber incident.
4. Train Employees: Educate staff on cybersecurity best practices and incident response protocols.
5. Continuously Test and Improve: Regularly assess cybersecurity defences and incident response strategies to pinpoint areas needing enhancement.
6. Collaborate with Stakeholders: Share threat intelligence and best practices with partners and industry colleagues.
7. Invest in Cyber Insurance: Consider cyber insurance to reduce your financial impact in the event of an attack.
8. Stay Informed: Keep abreast of the latest cyber threats and trends to counter potential attacks proactively.

How can you protect yourself from Cybercrime

In conclusion, practising good cybersecurity and cyber resilience is crucial for both individuals and companies to protect their digital assets.

Here are some ways individuals can protect their data:

• Create strong and unique passwords.
• Exercise caution when dealing with emails and attachments.
• Consider enabling two-factor authentication where possible.
• Maintain updated software and anti-virus software.
• Back up critical data.
• Stay updated on new threats and vulnerabilities.

In the midst of penning this commentary, the world has gone mad.

Amidst the chaos, we thought we would take the opportunity to understand the importance of this bright, slightly orange-yellow metal, which created the city of my birth and is featured prominently on the daily Bloomberg economic broadcasts.

Brief History of Gold

Gold has been used as a medium of exchange since early civilisation. According to archaeological evidence, gold was initially used by the Egyptians around 2600 BC, who prized its beauty and scarcity. Gold became known as a symbol of prosperity and divine favour when the Egyptians used it to make jewellery and ceremonial items. Similar to this, gold was used as a means of exchange by other ancient societies, such as the Greeks. Standardised currency began when gold coins were produced in Lydia (present-day Turkey) in about the sixth century BC.

Gold’s utility as a store of value was further cemented when it became the basis of the gold standard around the 1870s in America. By directly linking currencies to a fixed quantity of gold, the gold standard guaranteed stability in global finance and trade. From the 20th century onwards, fiat currencies gradually supplanted this system and were implemented into the global economy.

Modern-Day Value of Gold

In the modern global economy, gold remains a vital asset, often regarded as a safe haven during times of economic uncertainty. The value of gold typically rises during periods of inflation, currency devaluation, or geopolitical instability. This is because investors rush to gold when they lose confidence in other financial instruments, such as stocks or bonds.

One of the key reasons gold has remained a store of value is its scarcity. Unlike fiat currencies, which can be printed by governments at will, gold is a finite resource. The total amount of gold in the world is limited, and its supply cannot be artificially increased. This scarcity gives gold its inherent value, as it cannot be replicated or inflated like paper money.

Additionally, gold is durable and does not corrode or decay over time, further enhancing its status as a long-term store of value. This makes it an ideal asset for the preservation of wealth over generations, unlike other commodities that may be subject to spoilage or degradation.

Gold is also highly liquid, meaning it can be easily bought or sold in global markets. This liquidity ensures that gold retains its value regardless of location or market conditions. During times of crisis, gold remains one of the most liquid assets available, allowing investors to convert it into cash when needed.

Gold as a Safe Haven in Times of Economic Turmoil

Gold’s most significant appeal lies in its status as a safe haven during times of economic instability. During periods of high inflation, currency devaluation, or geopolitical tensions, investors rush to invest in gold as a protective measure for their wealth. This is because gold tends to hold its value even when other assets, such as stocks or bonds, experience volatility.

For example, during the 2008 global financial crisis, when stock markets plummeted and many financial institutions faced collapse, gold prices surged. Investors sought refuge in gold, knowing that it was less susceptible to the risks that plummeted other asset classes. Gold’s price performance during the crisis reinforced its reputation as a reliable hedge against economic instability.

Similarly, post the COVID-19 pandemic, the value of gold rose as central banks worldwide implemented large monetary stimulus packages. These measures, aimed at mitigating the economic fallout, led to fears of inflation and currency devaluation, prompting further investment in gold.

Trump’s Tariffs and the Strengthening of Gold in 2025

In 2025, the impact of Donald Trump’s tariffs on the global economy is still being felt. So far this year, Trump has implemented a series of protectionist measures, including tariffs on Chinese imports, in an attempt to reduce the US trade deficit and promote American manufacturing. While the tariffs were designed to benefit the US economy, they triggered retaliatory measures from China and other trading partners, leading to a protracted trade war.

The tariffs have resulted in higher costs of goods, disrupted global supply chains, and created uncertainty in financial markets. As mentioned previously, in times of economic uncertainty, investors often seek to hedge their risks by turning to gold, which is considered a stable and reliable asset. As a result, the price of gold has risen steadily and has reached a new high of US$3,167.71 on the 2nd of April 2025.

Moreover, the ongoing trade tensions between the US and China, coupled with concerns over inflation and the potential for a global recession, have further contributed to the rising demand for gold. The combination of tariffs, geopolitical instability, and inflationary pressures has created an environment in which gold is increasingly seen as a safe-haven investment, hence its increase to new share price highs.

At this stage, it does not appear as if geopolitical stability is about to return, and hence, gold will continue to shine.

Over the past few months, the South African healthcare landscape has experienced significant developments, both globally and locally. These changes could potentially impact the industry and the delivery of healthcare services in the country.

Global Impact: US Decision on PEPFAR Funding

A notable development occurred when US President Donald Trump signed an executive order to suspend funding for the President’s Emergency Plan for AIDS Relief (PEPFAR) to South Africa. While the long-term effects of this decision remain uncertain, concerns are mounting about its potential impact on the progress South Africa has made in combating the HIV/AIDS epidemic. PEPFAR has played a crucial role in the global fight against HIV/AIDS, providing critical resources for prevention, treatment, and care. The suspension of this funding leaves several key health intervention projects in a state of uncertainty, particularly as South Africa has one of the largest HIV populations in the world.

Budget Speech: South Africa

The country recently witnessed the challenges that come with the Government of National Unity (GNU). The annual budget speech, delivered by Minister of Finance Enoch Godongwana, was initially postponed due to a lack of consensus among the parties involved. However, the issue was resolved, and the speech was successfully delivered on 12 March 2025. Despite the delay, there has been little to no significant impact on the private healthcare sector. The medical scheme tax credits, a critical element in the private healthcare system, remain unchanged for the upcoming fiscal year, reflecting continuity in the sector’s taxation policy.

To read more about the Budget speech, click here

National Health Insurance (NHI) Update

Reports indicate that discussions were held between Minister in the Presidency for Planning, Monitoring, and Evaluation, Maropene Ramokgopa, Minister of Health Aaron Motsoaledi, and Democratic Alliance leader Johan Steenhuisen, during a Cabinet Lekgotla last month. These discussions focused on finding solutions to allow private healthcare and the NHI to coexist, ensuring that private sector involvement is incorporated into the NHI’s funding models and overall implementation.

Earlier this month, Minister Motsoaledi published the first draft of regulations under Section 55 of the NHI Act, which outlines governance structures and operational processes for the NHI Fund. Section 55 grants the Minister the authority to create regulations on several critical aspects of the NHI, including:

• Governance of the NHI Fund: Defining the board’s structure, responsibilities, and powers.
• Operations of the NHI Fund: Details on how the Fund will procure healthcare services, manage finances, and interact with healthcare providers and users.
• Funding of the NHI Fund: Clarification of the Fund’s sources of financing, including mandatory prepayments and additional funding streams.
• Procurement of Healthcare Services: Processes for engaging both public and private healthcare providers.
• Registration of Users: Requirements for individuals to register as NHI users and eligibility criteria.
• Additional Provisions: Other regulations deemed necessary for the NHI’s implementation.

These regulations mark a critical step in the NHI’s journey towards providing universal healthcare coverage to all South Africans.

Governance of the Medical Scheme Industry

In parallel, the Council for Medical Schemes (CMS), the statutory body responsible for regulating the private healthcare financing sector, has taken steps to address some of the issues highlighted by the Health Market Inquiry (HMI). One of the key findings of the HMI was the complexity and confusion many medical scheme members face when selecting the right plan, often opting for cheaper options that do not meet their healthcare needs adequately.

As part of the response, CMS has recommended standardising a supplementary benefit package. This would aim to simplify the process for choosing a medical scheme and better align benefits with the needs of members, ensuring that patients are at the centre of the healthcare system. The standardised package would include guidelines on benefit content, benefit ceilings, thresholds, and premiums.

In light of the above, CMS also announced plans to conduct a needs assessment to better understand the different market segments and how medical scheme options can be classified to cater to diverse beneficiary profiles.

Moving Forward

The recent advancements in the National Health Insurance Bill and CMS’s efforts to address issues in the private medical scheme industry are positive developments in the quest to provide universal healthcare coverage. While challenges remain, particularly regarding the integration of private healthcare into the NHI framework, the progress made thus far indicates that the South African healthcare system is moving towards the common goal of enhancing the quality and access to healthcare.

The most significant happening in the retirement fund industry in 2024 was the implementation of the two-pot system on 1 September 2024. The industry waited in anticipation to witness what would happen. Would there be a significant uptake? Would members change their minds after realising the effect of taking money out of their savings pot?

SARS reported that as of 31 January 2025, some R43 billion had been paid out to retirement fund members who withdrew money from their savings pot (10% of a member’s fund credit as of 31 August 2024, up to a maximum of R30 000, was automatically moved to the member’s savings pot).

SARS received 2 664 279 applications for tax directives for savings pot withdrawals. A total of 2 403 379 tax directives were approved for funds to be released. The remainder were declined for a variety of reasons, including incorrect identity numbers or tax numbers. SARS said its two-pot calculator on WhatsApp has been used 90 283 times since the implementation of the process.

FSCA Reports on the Two-Pot System Implementation

Following the implementation of the two-pot system and the high number of withdrawal applications, the FSCA released the following statistics:

• 887 active funds under FSCA supervision cover 155,000 participating employers and 9.6 million members.
• 42% of members who made withdrawals had a fund credit between R100,000 and R400,000, with the highest number of withdrawals among those with a credit of R100,000 to R250,000.
• The third-highest number of withdrawals came from members with a fund credit of only R20,000 to R50,000.
• Most withdrawals were made by members with a pensionable salary between R180,000 and R239,988 and between R60,000 and R119,988 per year.
• Higher-income earners (those earning over R600,000) made fewer withdrawals.
• The majority of withdrawals were made by members aged 31 to 41, followed by those between 41 and 51.

Challenges Faced

There were issues. According to the FSCA, members expressed frustration with:

• Poor communication from funds.
• Administrators’ websites being offline.
• Delays in receiving their payments.
• High transaction fees.

However, formal complaints remained low:

• The FSCA received only three formal complaints, two of which have been resolved.
• The Pension Funds Adjudicator received 23 formal complaints and 1,450 inquiries, which were referred to funds and administrators.

Additionally, members raised concerns about the high fees charged by funds and administrators. In September, the FSCA issued an Information Request requiring self-administered funds and administrators to report their withdrawal processing fees.

• From its analysis, the average fee per two-pot withdrawal was R357.
• The FSCA plans to engage with administrators charging higher fees to understand their reasoning and ensure fairness.

A Broader Economic Concern

The high volume of withdrawals underscores a serious issue affecting many South Africans: financial constraints and limited access to basic services.

The President acknowledged these challenges at the recent State of the Nation Address (SONA). It is hoped that the G20 Summit, to be held in Johannesburg later this year, will address these issues under the theme: “Fostering Solidarity, Equality & Sustainable Development.”

The Upside of the Two-Pot System

Despite the challenges, there were positives:

• SARS coped well with processing the high number of withdrawals.
• The FSCA approved rule amendments rapidly to facilitate the process.
• Except for a few complaints, the industry worked efficiently to achieve the end goal.
• Members struggling financially received payouts within weeks of their applications.
• Due to legislative withdrawal limits, estimates suggest that retirement outcomes for new members could be twice as strong by the time they retire.

What’s Next?

The two-pot system allows members to make one withdrawal from their savings pot per tax year.

With 1 March 2025—the start of the new tax year—around the corner, will we see another application surge?

We will keep you updated on further developments regarding this and other industry-related matters.