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Business Times reports that companies representing thousands of employees have asked retirement fund administrators to allow them to reduce contributions to employee retirement funds.
And as company revenues nose-dive as a result of the coronavirus lockdown, administrators expect the requests to ramp up over the coming weeks. Alexander Forbes reports that the administrator has had close to 100 employers asking to suspend or reduce retirement fund contributions. This is less than 10% of the employers who use funds administered by it, but the requests are an increasing trend. Sanlam Corporate Distribution says about 10% of the employers participating in Sanlam's umbrella retirement fund - mostly small ones - have already inquired about reducing contributions. Seshego Benefit Consulting also says about 10% of the employers to which his company is a consultant, with about 7,000 to 8,000 members, are considering a temporary cessation of contributions. Some employers have temporarily laid off employees on a no-work, no-pay basis, reducing their income and any retirement fund contributions and group life premiums calculated as a percentage of those earnings. But, appeals have been made to such employers to at least pay group life cover premiums as the failure to pay those premiums could have a devastating effect on families who might need to claim on this cover, say administrators, insurers and the Financial Sector Conduct Authority (FSCA).
- Read the full original of the report in the above regard by Laura Du Preez at BusinessLive
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