Employee Benefits

Updated: Jun 27, 2020

1. Pension/Provident Industry

Background: “South Africa has the lowest savings level reported since 2009, after households were recovering from the financial turmoil of 2008. Meanwhile, consumers are increasingly cutting back on living expenses in their battle for financial survival.”

These are some of the key findings of the latest Old Mutual Savings and Investment Monitor, which tracks the shifts in the financial attitudes and behaviour of South Africa’s working population:

Confidence in our local economy has plummeted to an all-time low of 31% – a considerable decrease from 55% in 2015 – with two-thirds of respondents describing their level of financial stress as “overwhelmingly” or “high”.

In terms of saving for retirement, a staggering 41% of property owners consider their primary residence to be part of their retirement nest-egg, while the use of pension and provident funds has been decreasing over the past year.

Dependency on children for future care and financial assistance during retirement is at its highest level yet. This correlates with a steadily growing sandwich generation: those who are supporting not only children, but also parents or other ageing dependents. The number of people in the sandwich generation has reached a record high of 29% in 2016, climbing considerably from 25% in 2015.

*Reference:  Old Mutual Superfund Member Update, December 2016

Taking the above mentioned data into consideration, Employer Pension Funds and Provident Funds are clearly becoming an all-time high necessity. These funds not only enhance the benefit structure of employers, but also empower (and force) their employees to timeously prepare for retirement.  In offering their employees the benefit of a retirement fund, employers motivate them to become more informed and conscious about their retirement funds/money than those who do not belong to a fund.

2. Medical Aid Industry