Most South Africans, regardless of race, know the story. Mismanagement of money that is owed to millions of civil servants for a lifetime is theft of the highest order and is an elaborate and deceitful way of forcing the middle class to pray for misconduct by the upper class and the well-connected. As Natasha Mazzone expressed in Business Tech, “it is very easy to be a socialist with other people’s money. It is very easy to have communist leanings when you have millions of other people’s rand to play with.
Not only do many South Africans worry about the misappropriate of pension funds through bailing out struggling parastatals, but they also worry about proposed legislation for rules on provident fund payout: ‘you will only be able to withdraw a third of your provident fund savings as a lump sum upon retirement, while the rest has to be invested in an income/annuity fund that pays you a monthly income. In my discussions with clients who are due for a provident fund payout in the years to come, I have picked up anxiety over this rule. Their concern is that even after a payout, as provident fund beneficiaries they are still beholden to the government for most of their monthly income. Should the government make unwise investment decisions with the provident fund, their income will suffer. This adds to their worry about the various forms of wealth tax the government could levy on any funds they hold.
Silver and gold investors who own wealth outside these institutions are in a less precarious situation. I guarantee that the person who owns even a small portion of the total value of their retirement fund in precious metals savings sleeps better at night than the person who is fully reliant on the government for retirement income.
Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
