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.

Happy 2025!

We hope you’ve had a relaxing and enjoyable break. As we welcome 2025, we’re looking forward to another year filled with opportunities and shared success.

It’s certainly been an eventful start worldwide, and access to healthcare remains a key topic of discussion. South Africa continues to grapple with defining the future of National Health Insurance. The World Health Organisation (WHO) issued an emergency appeal for USD 1,5 billion to aid countries facing health emergencies, while in contrast, the United States of America announced its intent to withdraw from the organisation.

Locally, the trend among private healthcare insurance providers is a heightened focus on increasing access to preventative care benefits.

I recently listened to Mel Robbin’s podcast, ‘How to Make Next Year the Best Year: Ask Yourself These 7 Questions,’ which inspired me to put together a health audit to help kickstart your health goals for the year.

Health Audit

Here are some questions you can use to reflect on your previous year:

Physical Health:

• Did I experience any major physical issues or injuries last year?
• Did I maintain a balanced diet? Were there any habits that affected my nutrition and health overall?
• How often did I exercise, and was my exercise regime sufficient to maintain or improve my fitness levels?

Mental Health:

• How did I manage stress?
• Did I have coping mechanisms that worked well?
• Did I make time for activities that brought me joy and relaxation?

Preventive Care:

• Did I go for regular check-ups, screenings and preventive tests?
• Did I follow through with recommended health screenings or treatments?
• Are there any health issues I ignored or didn’t fully address?

Habits and Lifestyle:

• Did I have any habits that I felt negatively impacted my health (e.g. smoking, excessive alcohol)?
• Was I able to maintain a healthy work-life balance?
• Did I spend enough time in nature or engage in social activities to support my well-being?

Maximising Healthcare Insurance Benefits:

• Did I fully utilise the benefits offered by my healthcare insurance (e.g. preventive and, screening benefits, prescriptions, mental health support)?
• Were there any medical services I paid for out-of-pocket that could have been covered by insurance?

Planning for the year ahead

Goals:

• What health goals do I want to achieve this year (e.g. weight loss, muscle gain, mental health improvement)?
• Are there any specific health challenges I want to focus on or prevent (e.g. managing chronic conditions, improving sleep quality)?
• What new healthy habits do I want to establish (e.g. eating more vegetables, regular workouts)?

Physical Health:

• What steps can I take to prevent physical issues or injuries? (e.g. strengthening exercise or enhanced safety precautions)
• How can I make exercise a regular part of my routine?
• How can I stay active even on busy days?

Nutrition:

• Are there any changes I want to make in my diet (e.g. cutting back on sugar, reducing processed food)?
• How can I plan meals and snacks ahead of time to make healthier choices?
• Should I consider consulting with a nutritionist or trying new eating habits?

Mental Health:

• What strategies can I use to manage stress better this year?
• How can I set aside more time for self-care and relaxation?
• How can I stay connected with loved ones or build a support system to help with emotional well-being?

Preventative Care:

• Are there any medical check-ups or preventive screenings I should schedule this year?
  TIP: Check with your healthcare insurance provider/ financial advisor for a detailed benefit brochure so you understand what benefits you can access.
• How can I stay more proactive in scheduling and following through with my healthcare appointments this year?
• Is there a particular health concern I need to focus on (e.g. managing hypertension and cholesterol levels)?

Habits and Lifestyle:

• What changes can I make to break unhealthy habits or replace them with positive ones?
• How can I work on achieving a better work-life balance this year?
• What can I do this year to connect with nature or others more often to boost my mental health (e.g. going for weekly walks or attending social events)?

Maximising Healthcare Insurance Benefits:

• How can I better understand and maximise my healthcare insurance benefits this year?
• How can I avoid unnecessary out-of-pocket expenses (e.g. being more mindful of network providers, referral requirements, and benefit limits)?

TIP: Review your benefits with your financial advisor and request detailed benefit brochures from your service provider.

It Is Always a Wise Decision to Invest in Your Health.

Prioritising physical and mental well-being can help reduce the risk of chronic illnesses and improve your quality of life. It’s an investment that pays dividends in terms of feeling better, staying active, and enjoying life to the fullest.

So, you are in a company pension or provident fund; therefore, your pension and financial security in retirement are sorted, right?

One of the sad facts of the South African experience is that approximately only 6% of all South Africans have a retirement benefit equivalent to their salary just prior to retirement. Most do not have enough retirement capital saved. This alarming statistic has not improved over the past 20 years despite the industry’s intense efforts to educate and advise retirement fund members.

The big danger of apathy and complacency is that you do not critically assess your financial journey through life on a regular (annual) basis, and you drift towards retirement without knowing your exact circumstances or whether you will have enough for retirement.

Once you take into account the increase in medical aid costs and longevity, the retirement picture can become quite challenging.

All is not lost, a critical assessment of your current financial position and the introduction of a committed plan of action to improve it will lead to a better retirement outcome.

The good news

Over the past year, there have been several positive major events which have happened in South Africa, namely:

1. The general election on 29 May and the forming of the Government of National Unity.
2. The introduction of the Two Pot retirement system on 1 September.
3. The overall reduction in the price of petrol and diesel.
4. The general increase in investment returns.
5. The reduction in interest rates by 0.5% (0.25% on 20 September and 0.25% on 21 November).
6. The reduction in the inflation rate to 2.8% year-on-year in October.

All these have had a positive effect on the economy, and most are beneficial to consumers, as they present an opportunity to make additional savings for retirement.

Reducing your retirement outcome

Many South African households are struggling financially due to increasing prices and the cost of living and have taken the opportunity to access part of their retirement savings through the Two Pot legislation changes. Almost two million fund members have withdrawn R35 billion from their funds to date, and SARS has collected approximately R5 billion in additional tax from this.

While this has been a great advantage for many to reduce their debt, it does mean that two million of the members in formal retirement funds have reduced their retirement outcomes. While some of the amounts have been small, if they have many years to go to retirement, the long-term effect can be dramatic. Of concern is the probability that some members will continue to take withdrawals from their savings portion on an ongoing basis, thus reducing their retirement outcome even further.

Some employers also allow members to adjust the retirement component of their annual salary package by increasing or reducing their retirement contributions on an annual basis. There is always the temptation to reduce this during times of financial stress to increase their take-home pay and not increase it again when their situation improves.

Additional savings opportunity

The reduction in interest rates has provided relief on the servicing of debt, such as housing and vehicle financing loans and credit card debt, resulting in lower payments.

It is a wonderful opportunity to put that monthly saving into additional voluntary contributions to your retirement fund and gain tax relief on these additional contributions.

Many people receive bonuses in December, and they should consider utilising part of this to save for their retirement and receive tax relief on the contributions.

Small steps like these can become very powerful if implemented regularly.

Most funds have a member portal on their website or through the fund’s WhatsApp account. These portals have powerful financial tools to assist fund members in assessing their retirement outcomes on an ongoing basis.

For example, the additional voluntary contribution calculation shows the effect of contributing an additional monthly amount. This is often the catalyst to motivate members to save more.

End Goal

Reaching retirement is not the end goal, it is just the start of the next phase of your life, your retirement journey. Take action today to ensure that you receive the retirement outcome that you want and deserve.

While the country is abuzz with the new two-pot system legislation, which came into effect on 1 September 2024, members are still pondering the pros and cons of the new legislation. The two-pot system aims to preserve two-thirds of members’ future contributions for retirement and in the event of a member changing employment. The legislation now also allows members to partially access their retirement savings should they encounter emergency financial situations while they are still employed. The flexibility in accessing some of the retirement money while working could assist in leveraging debts, but it would also reduce members’ future retirement savings.

Growing your retirement savings with the help of compound interest

Retirement planning is a long-term commitment, and the earlier you start saving, the better the impact of compound interest will be. Compound interest is defined as interest that is paid both on the original amount of money saved and on the interest that has been added to it. Simply referred to “interest earned on interest”. This means that over time, members’ investment savings can grow at an accelerating rate when invested.

Let’s look at an example to explain the concept:

A member invests an amount of R1,000 for a period of three years and earns 5% interest per year (assuming that all other factors are constant).

In year one, the return would be R50, which would start to compound in the following year. After the first year, the member would have made R1,050. By adding the same 5% interest in the second year, the member would get a R52.50 return, and the total amount would be R1,102.50. In the third year, the total growth would be R1,157.63 (R1,102.50 x 5%). The extra returns over and above the initial R50 interest gained are relatively small initially, but they grow steadily as time goes on. This concept is guaranteed to work in a long-term investment despite volatile markets, provided that the member refrains from withdrawing their money before their retirement date.

Accessing part of the retirement money now or annually is at an opportunity cost of earning more returns for the future. To illustrate this opportunity cost, most fund administrators have built two pot calculators showing members their potential loss of growth over time and explaining the present cost of withdrawing part of their retirement savings.

Below are factors that will enhance the concept of compound interest to work in your favour:

• A return rate that beats the inflation rate – These factors may be out of members’ control as they are dealt with more within the fund’s Investment Policy Statements (IPS) by the trustees of the funds. The risk factors can be mitigated with proper investment strategies and investment advice.
• Preserved retirement savings and continuous contributions – Keeping your money invested and ensuring monthly contributions will harness the effect of compound interest.
• Time horizon – This is a crucial factor; some members may start saving earlier than others, but investing longer allows the money in the fund to grow over time, enhancing the final amount available at retirement.

Our daily lives are evidence enough that we are living in a rapidly changing world, with instant gratification and consumption impacting us daily. The current generation is predicted to have longer life spans due to advanced technologies, wider access to wellness programs, and improved medical inventions. With such environmental effects, we are bound to develop cognitive and mental behavioural biases that influence our decision-making regarding investing.

It is imperative to have a retirement planning strategy (with constant review measures) in place. Members are to ensure that they get guidance from accredited financial planners when creating their plans, and it’s also critical to acquire benefit counselling when changing employment or at any life-changing event.

Making your money work for you

Apart from “eating into your future” money today and not allowing compound interest to work its magic, there are other disadvantages to consider when withdrawing your retirement savings before retiring, which include the taxation cost (marginal tax rate charged at withdrawal) and transactional administration costs.

Here are some ways members can improve their future retirement savings:

• Additional Voluntary Contributions (AVC) – Contributing extra to your retirement savings is a no-brainer; however, members struggle to either start or keep such contributions continuous due to affordability. The best trick is to align your AVC with your salary increment date or use a portion of your bonus incentive as a once-off AVC. Not only will you increase your retirement value but there is a tax deductibility benefit when putting extra into your retirement funds.
• Avoid withdrawing from the saving pot – Members should investigate utilising constructive budgeting tools to cater for monthly expenditures and creating emergency funds outside of their retirement vehicle (e.g. Bank Savings Account) for liquidity in times of need.

As per Albert Eistein’s infamous quote, “Compound interest is the eighth wonder of the world. He who understands it earns it …he who doesn’t … pays it.” Keep in mind that the key is to grow as much wealth now and retire comfortably later.

The private healthcare industry is abuzz as medical schemes announce their benefit changes and premium increases for the upcoming year.

The Council for Medical Schemes (CMS) issued a guideline for schemes to limit their premium increases for 2025 to 4.4%, plus “reasonable utilisation estimates”. However, market trend indicates that medical scheme increases will continue to be influenced by medical inflation, resulting in substantially higher than Consumer Price Index (CPI) increases.
During this period, members are allowed to change their plan options for the upcoming year. With the current South African economic climate and increasing living expenses, it is understandable why affordability remains one of the important factors members consider when selecting a plan option.

South African medical scheme members need to be savvy in their approach when choosing an option and utilising their benefits. It is important to balance affordability with appropriate benefits, which requires members to stay informed about benefits.

In this article, we outline risk-funded benefits that are available to members to gain access to appropriate healthcare and optimise utilisation.

Understanding Risk-funded Medical Scheme Benefits:

Prescribed Minimum Benefits (PMB)

This benefit covers a defined basket of care for treatment defined as emergency medical conditions and a list of 271 medical conditions. It ensures that qualifying medical scheme members have access to specified healthcare services, regardless of the benefit option they have selected.
Certain qualifying treatments may require the utilisation of a healthcare provider contracted to the scheme, commonly referred to as a Designated Service Provider (DSP), to qualify for full cover through this benefit.

Chronic Illness Benefit

The Chronic Illness Benefit covers members for a defined list of 26 chronic conditions. You need to apply to have your medicine and treatment covered for your chronic condition. The cover through this benefit is subject to limits, medication formularies and a defined basket of care.

Oncology

The medical scheme requires confirmation of the cancer diagnosis from the treating oncologist. Utilisation of a DSP may be a requirement for accessing this benefit, depending on plan choice. Plan choice may also dictate the level of care, as cover varies in overall limits to PMB level, and can extend cover to include biological drugs and innovative treatment.

Preventative Care

The purpose of this benefit is to encourage medical scheme members to go for their health checks, as early detection of certain conditions can lead to prevention and/or positive treatment outcomes. However, the basket of tests covered tends to vary from one scheme to the other. Some of the common tests or screenings include glucose, blood pressure, cholesterol and HIV tests. These screenings are subject to utilising a DSP. Some additional vaccines and tests that are usually age-band related, such as Flu, HPV and childhood vaccinations, mammograms and prostate screenings, can also be accessed through this benefit.

Maternity Benefit

This benefit is plan-dependent; the medical scheme specifies the basket of care, which may include pre and postnatal consultations, scans, and pathology tests. Members are encouraged to contact their medical scheme upon confirmation of pregnancy to register and activate access to these benefits.

Additional Benefits

The below are subject to plan choice and medical scheme benefits:

• Emergency Room consultation – this is generally limited to a specified number of casualty visits; qualifying criteria may be age and event-specific.
• GP Consultations – additional in-person/virtual GP consultations once a member’s day-to-day benefit is exhausted, subject to consulting with a contracted DSP; this may vary based on scheme and plan choice.
• Women’s Health – contraceptives, bone density scans.

Managed Care Benefits

This may vary from one medical scheme to the other, have definitive clinical qualifying criteria, and the application is subject to approval.

• Back and Neck Management Programme
• Mental Health Programme
• Post-Hospitalisation Programme

Should a member feel aggrieved by a funding decision made by the scheme, they may lodge a dispute or complaint with the medical scheme.

Ex-gratia

The scheme will review medical expenses not covered through available benefits or scheme rules, together with the case facts submitted through this application process.

A decision will be made on a case-by-case basis, where the scheme believes there are exceptional circumstances which warrant funding. This is not a medical scheme benefit, but it is classified as a discretionary fund where decisions by the scheme are final and cannot be disputed or appealed.

Take time to understand your benefits.

An authorisation or approval of a benefit does not guarantee that claims will be paid in full. Benefits may have limits, sub-limits, co-payments, require the use of DSP, and be subject to clinical entry criteria.

We acknowledge that scheme benefits and application processes may seem complex and challenging to navigate. Healthcare intermediaries serve as an excellent resource to facilitate and guide members through any hurdles they may encounter. For members, the benefit of taking the time to understand their cover better can save them from unexpected expenses.

When in doubt about a benefit, it is always best to contact your healthcare intermediary or scheme directly.

As we near 1 September 2024, we are examining the readiness for the new legislation, known as the two-pot system, which will impact members of retirement funds. This system presents both opportunities and challenges, as it allows for flexibility in accessing funds for immediate financial needs while also ensuring funds are preserved for retirement.

Here are some points to consider when withdrawing:

• Firstly, assess your financial needs, and determine the amount you need to withdraw and how it fits into your overall financial plan. Consider the impact on your long-term savings retirement plan.
• Consider tax implications: Understand how withdrawals will be taxed. Your savings pot withdrawal will be subjected to your marginal income tax rate, and SARS will levy penalty interest (IT88) on any tax arrears.
• Evaluate fees: Check for any transactional fees associated with withdrawing from the savings pot. Different administrators may have different rules regarding withdrawal fees.

To read more on the two-pot system and withdrawals, click here.

In this month’s edition, we shift the focus to cybersecurity awareness as the majority of the administrators will allow members to process their withdrawals online under the two-pot system, indicating a significant shift towards digitisation in the retirement fund management system. This modern approach within the industry will offer convenience and efficiency.

Since most of the online systems will be self-service, administrators have aimed to create user-friendly platforms; however, it is important to attend educational campaigns or engage with communications to understand how to access and navigate these tools.

Cybersecurity measures are a priority, as it is paramount to protect your data against breaches, fraud, and unauthorised access, given the sensitive nature of financial and personal data.

A proactive approach to security when protecting your personal information is a combination of vigilance, good practices, and utilising available tools.

Tips you can take to safeguard your personal information:

1. Secure Your Device: Use a strong passcode, biometric authentication (fingerprint or facial recognition), or both to lock your phone. – Enable automatic locking after a short period of inactivity.
2. Secure Personal Information: Keep sensitive documents in a safe place. Shred documents that contain personal information before discarding them.
3. Use Strong, Unique Passwords: Use complex passwords that include a mix of letters, numbers, and symbols. – Avoid using the same password across profiles and devices. Consider using a password manager to store and generate secure passwords.
4. Update Software Regularly: Keep your phone’s operating system and apps up to date to protect against vulnerabilities. Regularly back up data; you may use cloud services or other secure methods to back up important data in case of device loss or damage.
5. Use Secure Connections: Avoid accessing sensitive systems over public Wi-Fi. Use a VPN to secure your connection if necessary. Use cell phone data for secure transactions instead of public Wi-Fi.
6. Enable Two-Factor Authentication (2FA): If available, enable 2FA on accounts related to the system to add an extra layer of security.
7. Be Cautious of Phishing Attempts: Be wary of emails, texts, or calls requesting sensitive information. Verify the sender’s identity before responding. Avoid clicking on links or downloading attachments from unknown sources. Limit the amount of personal information you share on social media.
8. Monitor Financial Statements: Regularly review bank and credit card statements for any unauthorised transactions. Set up alerts for suspicious activity on your accounts.
9. Use Trusted Apps: Download apps only from official app stores (Google Play Store, Apple App Store). Check app permissions and only grant necessary ones.
10. Monitor App Permissions: Regularly review the permissions granted to apps and revoke any that are unnecessary for their function.
11. Use Security Software: Consider installing a reputable security app to protect against malware and phishing.

Remember to monitor for suspicious activities continuously. Staying alert for potential scams and seeking professional financial advice is crucial for making informed decisions that align with your financial goals and prevent you from falling prey to scams.

Tips sourced from www.experian.com.

As we reflect back on 2024, it’s difficult to comprehend where the time has gone. It reminds me of an elderly gentleman I once encountered at a Retirement Workshop who aptly said, “Life is like an hourglass—the sand seems to flow faster as it runs out.”

Looking back on the year, we can identify several significant events for South Africa.

7th National Election

The first is that South Africa celebrated another successful democratic, free and fair, election. The ANC lost its majority vote, with the newly formed MK Party making a powerful statement, with the support of nearly 50% of the KwaZulu-Natal voters and 15% nationally.

Tense weeks followed, as the political parties robustly negotiated the way forward for the country. Investor sentiment was negative, and money continued to flow from the bond markets. Following the negotiations, the political parties agreed to form a Government of National Unity (GNU), with ministerial representation for all the parties forming the GNU. Global investors have responded positively, with money once again flowing back into the country and the All-Share Index reaching record highs. There will no doubt be significant challenges going forward but we once again remain confident that the coalition government will act in the best interests of all South Africans.

National Health Insurance

The second significant event was that the National Health Insurance (NHI) bill was signed into law on 15 May 2024. The objective of the NHI is to introduce quality healthcare access for all South Africans and eradicate the current inequalities that exist in the country. The signing of the bill into law was not well received by many stakeholders, despite the concerns raised during extensive public engagements, the President still signed the bill into law without significant change. Initially, there is no impact as medical benefits remain in their current form. Industry commentary following the passing of the NHI bill into law is that the actual introduction of NHI is still at least ten years away. It is anticipated the Act in its current form will be legally challenged by many stakeholders as they believe there has been insufficient focus on critical areas, such as funding, human resource reallocation, current public sector healthcare corruption and the rollout process for the implementation of NHI. The status quo remains until further dialogue and communication is forthcoming from the healthcare industry.

Two-Pot (Component) System

The third significant event was the signing into law of the two-pot legislation, (I will refer to the pot, although the legislation refers to component) after several postponements. The effective date is 1 September 2024. Although there has been extensive previous communication from Chartered Employee Benefits, Fund administrators and the media, there still appears to be some confusion about who is affected by the two-pot system, so I will attempt to clarify some of these misconceptions below:

• The new system applies to the build-up phase of retirement, namely those members contributing to their retirement funds. It does not apply to pensioners; however, if a pensioner is contributing to a Retirement Annuity, it will apply.
• Members who are “55 years or older” on 1 March 2021 and have remained a member of the same Provident Fund will automatically be excluded from the two-pot system. These members can choose to opt into the two-pot system. They have until 1 September 2025 to decide if they wish to opt in, and thereafter, they can no longer opt-in.
• The two-pot system applies to both defined benefit and defined contribution funds. It also applies to pension, provident, preservation, and retirement annuity (RA) funds. It does not apply to beneficiary funds and unclaimed benefit funds.
• “Legacy” or “old generation” RA funds can be exempted. The legacy RAs are contracts held by an RA fund entered before 1 September 2024 that include a pre-universal life or universal life component. These funds can apply to the FSCA for an exemption from the two-pot system.
• Deferred pensioners will only have two pots in a fund (these are people who resigned and opted to leave their money in the fund until retirement). These members will have a vested pot and a savings pot. They will not have a retirement pot, because they are no longer making contributions. Their savings pot will consist entirely of the seed capital.
• Members are permitted one withdrawal per tax year, not per calendar year.
• A member not withdrawing from the savings pot, will not forfeit access to the amount they could have drawn in subsequent years.
• A member belonging to more than one fund, e.g., an RA and an occupational fund, can withdraw from each savings pot as long as the minimum value exceeds R2000.
• Withdrawals from the savings pot, while in service, are taxed at the member’s marginal rate of tax.
• Funds were required to submit rule amendments to the FSCA by 15 July 2024. If the rule amendments have not been approved by 1 September 2024, members will be unable to withdraw from the savings pot.

As we move forward into the second half of 2024, the retirement fund industry is buzzing. Fund administrators and service providers are hard at work making changes to systems and processes.

Consultants are engaging with members to educate them on the two-pot system to help members understand the implications and impact of withdrawing money from their savings pot prior to retirement.

We watch with interest the progress of the Government of National Unity and the challenges anticipated with the rollout of the NHI.

As tax season approaches, we reshare important information on preparing for the tax season.

The dates for the 2024 filing season are:

• Auto-assessment notices: 1 July 2024 to 14 July 2024
• Individual taxpayers (non-provisional): 15 July 2024 to 21 October 2024

Minister of Finance, Mr Enoch Godongwana, during his Budget Speech on 21 February 2024, confirmed that the Medical Scheme Fees Tax Credit (MTC) will remain for this tax year. The tax year commenced on 1 March 2024, and the monthly rebates for medical scheme contributions are as follows:

• Taxpayer: R364
• First dependant: R364
• Every subsequent dependant: R246

It is important to understand how this rebate works; it is non-refundable and used to reduce a person’s normal tax. Remember that an employer is obligated to adjust the monthly PAYE deductions by the medical tax credit, and therefore, employees would have already received the medical tax credit during the year if the medical scheme premium is deducted via payroll. Additionally, it follows that these tax credits are thus applicable to taxpayers only.

We encourage South African taxpayers to prepare their relevant financial and supporting documentation to facilitate a smooth filing process. With this in mind, it is important to take note of the following dates:

• The deadline (closing date) for non-provisional taxpayers is 23 November 2024.
• Taxpayers who file online have until 24 October 2024 to submit their return.
• Employers are required to issue employee tax certificates (IRP5/IT3(a)) by 31May 2024.
• Medical Scheme Tax Certificates are usually available from the last week of May and will be shared by your medical scheme. If you have not received your certificate, please contact your medical scheme provider or healthcare intermediary for assistance.

Understanding additional claimable expenses for medical scheme members

The Additional Medical Expenses Tax Credit (AMTC) is a non-refundable rebate and is used to reduce the normal tax a person pays, similar to the MTC. This rebate is calculated against the qualifying out-of-pocket medical expenses that an individual who belongs to a South African registered medical scheme incurred. If you submit all your medical expenses to your medical aid, this amount is normally reflected on the tax certificate from the medical aid as ‘claims not paid’, and you will not need to calculate this yourself when submitting your taxes. Here is a list of qualifying medical expenses:

• Services rendered and medicines supplied by any duly registered medical practitioner, dentist, optometrist, homoeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopaedist.
• Hospitalisation in a registered hospital or nursing home.
• Home nursing by a registered nurse, midwife or nursing assistant, including services supplied by any nursing agency.
• Medicines prescribed by any duly registered medical practitioner and acquired from any duly registered pharmacist.
• Expenditure incurred outside South Africa in respect of services rendered or medicines supplied which are substantially similar to the services and medicines listed above.
• Any expenses prescribed by the Commissioner and incurred because of any physical impairment or disability.

The calculation of the AMTC rebate is fairly complex; it is based on the individual’s taxable income, and there are qualifying categories such as insured persons 65 years and older, insured persons/spouses or children with a disability or persons under 65 with no disability. Please click on this link, or you can access the details of the calculation at www.sars.gov.za.

Paying medical scheme contributions for third parties

When a taxpayer is paying scheme contributions from their personal bank account for a spouse or parents who are not on the same membership, they can include this as part of their SARS return. If SARS requests proof, a medical aid contribution certificate from the medical scheme will be required with proof of payment, as well as a letter indicating the reason you’re making payment where you’re not the main member and whether the spouse or parents are financially dependent on you.

Medical Insurance

This type of insurance is not registered as a medical scheme in South Africa and does not qualify for the above medical tax and additional medical tax credits.

It is advisable to seek out professional tax advice from a registered tax practitioner when filing your returns.