Johannesburg - The government's planned national savings fund, in terms of which everyone would have to contribute to a compulsory state-controlled pension fund through taxation, will not be implemented next year as previously planned.

The next discussion document on the plan, known as the National Social Security Fund or NSSS, is expected to be published only in October.

Ever since the introduction of the NSSS was announced more than two years ago much has been done, but at this stage there is still very little clarity.

The only thing that is more or less certain is that no aspect of the fund will come into operation next year.

Other than previously, the Treasury is avoiding giving a time frame for the fund's introduction, and there is ever less communication about it.

The only conclusion that can be drawn is that the original date of implementation, 2010, has been quietly shelved.

Spokesperson for the National Treasury Lindani Mbunyuza says that work is being done on the discussion document, but as far as health insurance is concerned nothing has been put on the table.

This is something that deserves serious attention because the national savings fund needs to provide not only for retirement, but also for medical expenses as well as death and disability cover.

In light of the fragmented composition of the South African economy and the demography of the population, this means that the distribution of the money in the savings fund will have to be customised so that a major portion of the benefits goes to medical costs, as well as to death and disability cover.

Even though it is important that sufficient provision be made for retirement, voices are increasingly being raised for greater emphasis on other macroeconomic aspects because the economic crisis is imposing greater demands on the state coffers.

David Gluckman, chief executive of Sanlam Umbrella Solutions, says provision for a reasonably comfortable retirement for all citizens is desirable, but there are other matters requiring attention first. These include education, healthcare, poverty relief, housing and job creation.

The estimated R40bn to R60bn that it will cost to introduce a national savings fund in the more or less 10-year transitional phase could be better applied to solving other macroeconomic problems.

Two important demographic statistics that have to be taken into account when calculating benefits from the savings fund, reckons Gluckman, are South Africa's death statistics and high unemployment rate.

The most recent figures indicate that only 30% to 40% of all 20-year-old men will reach retirement age. These people therefore do not need a retirement fund, but rather comprehensive death cover so as not to expose their next of kin to years of financial hardship.

South Africa also has a very high unemployment rate and no pension fund industry reform will help the jobless, he points out.

Gluckman argues that the money that could be spent on a national savings fund could more productively be applied to stimulating economic growth and thus increasing employment.

He reckons that amendments to the existing retirement-provision setup could possibly accommodate people currently excluded from the pension system. In this way risk could be eliminated and the cost of a system, whose benefits are indeterminable at this stage, saved.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.