Regulation 28 allows retirement funds to build more resilient investment strategies

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SPONSORED | When OldMutualSA Corporate research invited eight SA families to participate in a social experiment testing their preparedness for retirement, they were in for a rude reality check.

With this situation in mind, the relaxation of limits within regulation 28, if managed wisely, offers retirement funds an opportunity to build more resilient investment strategies to target improved retirement outcomes.The amendment’s most pressing advantage is the flexibility for retirement funds to access a wider set of opportunities for growth as well as diversification.

The amendments also bring SA better in line with global capital structures, which is important in an interconnected world, and enhances the country’s ability to trade and deal with other countries. This standardisation is particularly important for a small, open economy such as SA as it facilitates trade and flow of money and improves our global appeal to foreign investors.

The alignment produced by these foreign exchange changes means our economy is more attractive to investors who have a greater degree of confidence in our compliance to global financial norms.Though the relaxation of the limit may result in some selling pressure on SA markets as asset managers rebalance their portfolios over the next year or two, this is likely to be short term.

Changes to regulation 28 have sought to encourage investment by retirement funds into infrastructure assets

 

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