Today's Labour News

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retirementMoneyweb writes that SA can improve its pension system by introducing a minimum level of compulsory contributions to retirement savings vehicles or increasing the level of preservation when members change jobs.  

This is indicated in the 10th Annual Melbourne Mercer Global Pension Index, which benchmarks the retirement income systems of 34 countries against roughly 40 indicators.  While SA scored relatively well as to the integrity of its retirement income system, the research raises questions about the adequacy and sustainability thereof and gives the country an overall score of 52.7 (C grading).  SA has been on a gradual yet rocky road with regard to retirement reform.  New regulations will require retirement funds to implement a default investment, preservation and annuity strategy by 1 March 2019, which should lead to better retirement outcomes for some members.  But high unemployment and low economic growth rate have hindered reform efforts and attempts to introduce compulsory annuitisation in the provident fund space have effectively stalled.  To improve its overall score, the researchers recommend that SA increase the minimum level of support for the poorest pensioners and increase the coverage of employees in occupational pension schemes.  They also recommend that SA Africa introduce a requirement that part of the retirement benefit from provident fund arrangements be taken as an income in retirement (as applies to pension funds and retirement annuities).

  • Read this report by Ingé Lamprecht in full at Moneyweb

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