Rising pension cash-outs worry insurers

Upfront: Most pensioners want a big payout rather than smaller payments over time
Upfront: Most pensioners want a big payout rather than smaller payments over time

Legislative changes to the Retirement Fund Act allowing pensioners to cash out 50% of their accumulated pension packages, are rattling the life insurance industry, with Botswana Insurance Holdings Limited raising the alarm on increasing pension cash-outs and falling annuity sales.

Since October 2022, amendments to the Act have provided for enhanced withdrawals at retirement, raising the commutable or cash payout of the pension at retirement, from one-third to 50% of accrued savings.

In a briefing on the group’s financial results recently, BIHL CEO, Catherine Lesetedi, revealed that seven out of 10 pensioners are opting to liquidate the portion of their retirement benefits that the law allows, instead of saving them for the continuous monthly payments called annuities.


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