BPOPF warns as pension cash-outs spiral :: Mmegi Online

The Botswana Public Officers Pension Fund (BPOPF), the country’s largest pension fund, says an old age poverty crisis is not in the future, but is already present, due to the high rate of pensioners cashing 50% of their nest eggs at retirement.

Changes to the Retirement Fund Act in October 2022 have allowed different classes of pension fund members to encash greater amounts of their savings for loans, mortgages, and medical expenses or receive a cash payout of 50% of savings, rather than the previous one-third.

Local pension funds estimate that at least seven out of every 10 pensioners are cashing out the maximum 50% at retirement, a situation that leaves many with net replacement ratios lower than the ideal. The net replacement ratio is the ratio of one’s pension compared to the final salary before retirement, which indicates how a pensioner will be able to survive after retirement.

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BPOPF warns as pension cash-outs spiral

The Botswana Public Officers Pension Fund (BPOPF), the country’s largest pension fund, says an old age poverty crisis is not in the future, but is already present, due to the high rate of pensioners cashing 50% of their nest eggs at retirement.

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