Your pension fund will soon be able to invest more of your money abroad

Galileo Capital’s Warren Ingram explains why the announcement of Article 28 contained in the budget speech is a huge step forward.

The 2022 budget tabled on February 23 was largely good news, especially when it came to tax relief.

There will be no fuel tax increase, tax brackets have been favorably adjusted and corporate taxes have been reduced.

RELATED: Tax Relief Announcement: Good for Individuals, Businesses and Eventually Sars Too

In his first budget speech, Finance Minister Enoch Godongwana also announced that amendments to Regulation 28 of the Pension Funds Act would be released in March.

The amendments would allow South African pension and savings funds to invest more of their capital overseas – up to 45%.

This includes the existing 10% allocation for investments in Africa.

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Personal financial adviser Warren Ingram (Executive Director of Galileo Capital) says this massive relaxation of exchange controls is a hugely positive sign.

He chats with Bruce Whitfield on The Money Show.

The amendment is to effectively increase our offshore allocation from 30% to 35%. That might seem like a small number until you realize how important pension funds are…

Warren Ingram, Personal Financial Advisor and Executive Director – Galileo Capital

Under the circumstances, it’s a huge gesture and I don’t think it will be the last gesture.

Warren Ingram, Personal Financial Advisor and Executive Director – Galileo Capital

If you add the exposure to Africa, pension funds can invest 45% of their assets outside of South Africa… Add all the rand hedging stocks on the JSE, and it’s very possible that someone in a retirement fund here could have 50% or 70% of their assets actually spread across the world.

Warren Ingram, Personal Financial Advisor and Executive Director – Galileo Capital

Not too long ago, Ingram points out, discussion of Section 28 centered on the impending panic over the ruling party planning to prescribe assets.

RELATED: Asset Prescription: IRR ‘sows panic’ over access to ANC pensions

This is another major signal at a time when we need to take these signals seriously.

Warren Ingram, Personal Financial Advisor and Executive Director – Galileo Capital

For all the details of Ingram’s analysis, listen to the interview below:


Learn more about personal finance with Warren Ingram

Dolores W. Simon