Reform deadline will not be met
SOUTH AFRICA - Experts have warned the government has been "dragging its feet" on pension reform and the 2010 deadline will not be met.
Sean Segars, director of strategic development at South Africa's third largest asset manager STANLIB, said the firm was convinced the government was already slipping behind its deadline.
He also warned: "Small pension funds are not necessarily going to survive, because part of the contributions will have to go to the national scheme."
Segars' fears were backed up by the minutes of a meeting of the Life Officers Association of South Africa and the National Treasury last May.
In the meeting, the treasury admitted the 2010 deadline was a stretch because the government was still deciding on final milestones in the timeline.
David Harris, managing director of Tor Financial Consulting, said the problem was the lack of a consensus view.
"There are two departments driving this, the Ministry of Social Development and the Treasury, and each have different views, there isn't a united view on pension reform at this stage," said Harris.
He said a number of international models had been explored.
"I think the timescale is likely to slip and the implementation is challenging, but the need for pension reform hasn't gone away," warned Harris.
Mick Jenkins, director at investment consultancy Fifth Quadrant, also said the timetable was ambitious.
"The government will do well to make its target, as the proposed implementation date seems ambitious," he said.
He also warned: "Small pension funds are not necessarily going to survive, because part of the contributions will have to go to the national scheme."
Segars' fears were backed up by the minutes of a meeting of the Life Officers Association of South Africa and the National Treasury last May.
In the meeting, the treasury admitted the 2010 deadline was a stretch because the government was still deciding on final milestones in the timeline.
David Harris, managing director of Tor Financial Consulting, said the problem was the lack of a consensus view.
"There are two departments driving this, the Ministry of Social Development and the Treasury, and each have different views, there isn't a united view on pension reform at this stage," said Harris.
He said a number of international models had been explored.
"I think the timescale is likely to slip and the implementation is challenging, but the need for pension reform hasn't gone away," warned Harris.
Mick Jenkins, director at investment consultancy Fifth Quadrant, also said the timetable was ambitious.
"The government will do well to make its target, as the proposed implementation date seems ambitious," he said.
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