Retirement administrators were flooded with requests for withdrawals as the two-pot system came into effect on Monday.
This despite warnings about the taxation of these withdrawals and the impact it will have on members’ retirement fund benefits.
Many retirement portals struggled with volumes, placing holding statements on their websites confirming that they are experiencing high traffic volumes.
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Sanlam said it had experienced spikes of call and mail centre volumes across its service centres and although the high volumes have brought about congestion and placed significant pressure on teams across the business, all Sanlam systems remain functional.
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By midday, 3 September, Sanlam’s WhatsApp line recorded more than 84 000 messages compared to a daily average of about 18 000 messages.
On 2 September, the Sanlam Life and Savings call centre received 15 000 calls, compared to a daily average of about 4 500 calls.
The majority of these were related to two-pot enquiries. The Sanlam Corporate client call centre received just over 5 500 calls from 2 September to 5pm on 3 September.
The call centre also processed just over 5 500 two-pot withdrawal requests over this period.
Old Mutual had 93 000 people interacting with its WhatsApp channel on Monday and thousands of calls to the call centre, which it says is being well-managed.
Old Mutual says its WhatsApp channel is equipped to handle over 600 000 applications.
There was television footage of eager people queuing at employer offices, hoping to access their funds, and one broker consultant told City Press that he was receiving withdrawal requests marked as “urgent”.
However, some funds have seen less than expected numbers. These were in the retail divisions, which relate to retirement annuities, and which are often advised products.
While Momentum Corporate, which provides employee benefits, is still to release its figures, the retail business Momentum Investo has only experienced withdrawal submissions equal to 0.3% of their in-force retirement contracts. This equates to just over R11 million.
They are fully integrated into the SA Revenu Service’s (Sars) system, and some payments have already been made.
Metropolitan says it has also experienced less withdrawal submissions than expected for retirement annuities, although they are seeing walk-in clients at their branches.
Nevertheless, not all members should expect payments this week, especially from employer funds as these account for a far higher number of members.
In some cases, administrators will take several weeks before confirming payment and many have delayed the acceptance of withdrawal submissions.
AlexForbes says they expect to take 20 working days before members would receive payment, assuming applications are fully and correctly completed.
Balances need to be confirmed before calculating the seeding capital that will be transferred to the savings pot. All funds must first receive a tax directive from Sars.
Sars is aiming for a turn-around time of 48 hours to process the directive once it arrives at Sars.
In anticipation of the flood of withdrawal applications, some administrators have phased in the withdrawal process.
Old Mutual decided to release its capability in two phases to assist with management of the volumes and to ensure their ability to service customers. Withdrawal applications can only be accepted from 23 September.
From 2 to 22 September, Old Mutual customers will be able to view their savings, retirement and vested pot balances via the Old Mutual channel on WhatsApp. This means customers will be able to see exactly how much they have in each pot and what is available for withdrawal from the savings Pot.
The WhatsApp channel can also provide an estimated tax amount. However, to determine the exact tax payable, Old Mutual will apply for a tax directive from Sars.
The next phase starts on 23 September, when the Old Mutual channel on WhatsApp will start accepting withdrawal applications.
Once an application has been received, it will undergo a vetting process to ensure that the personal details supplied match the information in their system.
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Discovery will only open for retail withdrawals on 8 September and those withdrawal applications will have to be done through the retirement annuity member’s adviser. This will ensure that the member fully understands the financial consequences of making the withdrawal.
The withdrawal from provident or pension funds managed by Discovery Corporate and Employee Benefits will only commence on 16 September.
Guy Chennells, chief commercial officer at Discovery Corporate and Employee Benefits says this was a strategic decision to ensure that the system was ready for the volume of applications.
As the 10% seeding capital (to a maximum of R30 000) has to be calculated on the balance value as at 31 August, this has given Discovery time to make accurate calculations and apply them with thorough checking before transferring to the savings pot.
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“This seeding capital is a once-off transfer which people can access, so we do not want any mistakes,” says Chennells, who adds that while the systems have been checked in testing, they will first test the system with their own staff in production in order to pick up any system snags which can be resolved before opening to the public and thereby avoiding a backlog.
Once they receive withdrawal requests, Discovery estimates that they will be able to make payment within three to five days of a withdrawal application.
Chennells says this will also give members an opportunity to reflect on their decision to make a withdrawal rather than being caught up in the frenzy of this week.
Discovery’s withdrawal calculator, which members of any retirement fund can use to calculate the impact of their withdrawal and tax paid, had over 100 000 unique users by Tuesday.
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