Today's Labour News

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AlexanderForbesBL Premium reports that annual member insights survey by Alexander Forbes (AF) has highlighted the dire retirement prospects facing most SA workers.

The survey, which used data from all the SA retirement funds administered by the company covering almost 1-million members and 2,400 employers up to end-December 2020, showed that local workers were on average projected to enter retirement with an income of just 40.51% of their final salary. Only about 6% of those surveyed were likely to enjoy a retirement income above 75% of their final pensionable salary when they stopped working. The survey also showed the devastating impact of Covid-19 on savers’ retirement prospects due to many being retrenched or having to temporarily suspend pension contributions. AF found that about 30% of the retirement funds it administered implemented contribution holidays or reduced contributions due to the pandemic. About 5% still have such relief measures in place. The survey also highlighted SA’s pitifully low preservation rate. It showed that more than 90% of retirement fund members did not preserve their pensions when leaving a job, which AF put down to a lack of financial acumen and the need for quick access to cash. AF said that was why it supported the so-called “two-bucket” pension system proposed by the National Treasury, which would see pension savings split into one pot that must be preserved until retirement and another that could be accessed in emergencies. The fund administrator commented that that was a pragmatic solution that would meet the short- and long-term needs of retirement fund members.

  • Read the full original of the report in the above regard by Garth Theunissen at BusinessLive (subscriber access only)

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