Johannesburg - More
than half (60%) of pensioners did not believe their savings
were sufficient to last them the rest of their lives, a new survey
released on Thursday found.
The 2010 annual Sanlam survey of the local retirement fund industry
and its members showed 80% of retirement funds did not
provide post-retirement medical aid, and that 50% of pensioners
faced increasing responsibilities such as dependants, while
29% still had debt.
The findings were "extremely worrying" given that while the respondents
polled were actively saving for retirement or had done so
in the past, they were not doing enough, CEO of Sanlam employee benefits
Paul Myeza said.
"If those who are currently saving are doing so inadequately, and
it is well known that many, many South Africans aren't saving at
all, then we are facing a national crisis that needs to be urgently
addressed by legislative channels."
Myeza said the country's youth "should learn from the mistakes" made
by current pensioners and ensure a secure retirement.
In addition to the 300 trustees and principal officers polled this
year and in previous years, the 2010 survey included a sample of
754 active members of retirement funds and 250 pensioners who used
to contribute to retirement funds.
The survey found 50% of retirement fund members interviewed
believed they were on track for their retirement planning.
However the average contribution from members' monthly salaries
was well below the recommended level of 15%, indicating
a general lack of awareness of their actual situation.
'Concerning'
The total employer and employee contributions was shown to be an average
of 11.7%, marginally above 2009's level at 11.3%,
yet still falling short of the recommended 15%.
Self-employed respondents showed their retirement contributions were
significantly less, at an average of four percent of their salary
per month.
According to Myeza, active retirement fund members appeared to have
distorted views of their retirement planning.
"It is concerning that so many members believe they are putting enough
away for their retirement, yet the reality is that they are falling
far short of what they will need to maintain their current lifestyles."
The fact that the ramifications of poor retirement planning were embodied
by so many current pensioners was distressing, with more and
more elderly still burdened with debt and dependants.
"Yet the likelihood of this situation becoming a reality is still
being disregarded by those who have the time to do something about
it."
He said 32% of members had never reviewed their portfolio construction,
while 49% of respondents interviewed did not understand
how market movements could affect their fund.
A total of 43% were unaware of how their money was invested
and 53% were not interested in learning how to invest
their retirement fund effectively.
"In addition, 69% of members could not name one of their retirement
fund trustees, while 33% were not aware that they could nominate trustees," Myeza said.
- Sapa