SOUTH AFRICA - More than half of 15-year olds won't live to the claim their pensions due to the rampant HIV/AIDS epidemic in South Africa, a report has found.
A massive 11% (5.4 million) of the nation's population is infected with either HIV or AIDS, driven largely by the 15-24 age group, the Demographic Impact of HIV/Aids in South Africa: National and Provincial Indicators report found.
This will have a significant impact on the nation's pension industry. In an earlier interview with Global Pensions, Jonathan Dixon, chief director at the South African Treasury, described it as "a major factor" when looking at things like modelling.
"Quite frankly we need to do some major work on that. In terms of mortality rates it is an interesting issue because your average mortality age comes down," said Dixon. "But it is a strange pattern where it mainly affects people in the productive stage of their lives. Those individuals who do reach retirement age are not impacted by it. They are living longer and are part of the same international trends in longevity."
Peter Moyo, managing director of Alexander Forbes, added: “If we understand the actual profile of a fund we can tell that fund to push up its insured benefits and push down the retirement benefits because the chances are a lot of the members are not going to retire.”
The Co-operative Group's Somerfield Pension Scheme has completed a buy-in with Pension Insurance Corporation (PIC), insuring the benefits of its pensioner members.
Caroline Rookes CBE and Michele Hirons-Wood have joined The Pension Superfund's board of trustees to focus on maintaining governance standards and safeguarding member benefits.
The first specialist independent firm advising pension schemes on bulk annuities or moving to a consolidator has been set up with ambitions to shake up the market.