SOUTH AFRICA - Some 46% of South African organisations questioned in a recent survey have no official Aids policy, even though Aids is widely expected to have a serious impact on pensions. The Sanlam Employee Benefits 11th Biennial Survey of Retirement Benefits in South Africa questioned just under 200 pension funds in the Republic, both DB, DC and umbrella funds, (which are similar to stakeholder pensions in the UK).
Though only two respondents reported their business had so far been affected to a large extent by Aids, 11% expected to be so in the future, with 33% expecting the effect to be fairly limited.
Two-thirds of all funds expect the cost of risk benefits to increase by between 10 and 30% over the next two years as a direct result of Aids.
Another finding of the survey shows that 78% of employers pay contributions of more than 7.5% of salary into DC schemes; the majority of employees - 55% - paying contributions of 7.5% or more.
Two trends were identified by Kobus Hanekom, head of employee benefits and general consulting at Sanlam Life Assurance, since the last survey two years ago: the transfer of responsibility for members to insurance companies in DC schemes at retirement and a growing use of member directed investment choices.
The vast majority of DC funds transfer responsibility for payment of pensions to insurance companies at retirement. Hanekom said:“Ninety-five per cent of DC funds no longer retain pensioners as members at retirement.
“The capital accumulated is used to buy an annuity.”
He attributed the growth in member directed investment choices in umbrella funds to the availability of more advanced technology.
Life expectancy in the UK saw no improvement between 2015 and 2017 as the number of people aged over 90 hit a record high, latest Office for National Statistics (ONS) data reveals.
Self-administered pension funds spent £14bn on payments to pensioners in Q2 2018, but only received £11.4bn of contributions (net of refunds), latest Office for National Statistics (ONS) data reveals.
The Pensions and Lifetime Savings Association (PLSA) has named the 17 members of its inaugural policy board after a competitive application process with 60 candidates.