The AIDS epidemic in South Africa could result in increased pension contributions from 8.5% to 12.5% of salary by 2005, according to research by Metropolitan Asset Management (MeAM).
Using a broad-based demographic model, MetAM researched the impact of AIDS on the South African population and predicted pension contribution increases for typical companies operating within the manufacuring sector.
Steven Kramer of the Metropolitan Aids Research Unit said that pension contribution increases included the total contributions of both employer and employee.
According to Kramer, the increases will imply greater costs for the employer. He added that these increases are predicted in the absence of any intervention to try curb the disease.
Intervention will be more cost effective in the long run rather than increased contributions, he said.
By Janet Du Chenne
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