IISA Sun City Conference

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IISA Sun City Conference

• Retirement Reform
• David OBrien
• 29 June 2009

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South Africans attitude to savings
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Retirement Provision Formally Employed
QLFS 2008 PFAR 2005, Old Mutual Research
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Pension Fund industry view contributions
X
GAP
Target 13x Annual Salary
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Case Study Pension Fund
6
Case Study Pension Fund SOAP House Other
products
7
SOAP Nett Replacement Ratio for Population
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. reform is a process, not an event. Trevor
Manuel, Minister of Finance
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Government View - Savings
Private (Not Tax Deductible)
750
Voluntary
Private (Tax Deductible)
150
SALARY PER ANNUM (000S)
5 - 25 Industry Funds
75
DB?
DC?
Compulsory
Mining Industry
National Fund
Etc.
Meat Industry
Metal Industry
Print Industry
GEPF
Retail Industry
12
SOAP
0
9.4m (3.9m)
8.3m (3.7m)
9.3m (3.8m)
2.0m (1.6m)
7.0m (3.6m)
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Alternate View Savings
Please note that the numbers used in the left
hand column for the threshold levels are
illustrative should not be seen as definitive
Uncapped
20 - 200 Funds
Private (Tax Deductible)
Auto Enrolment / Mandatory
150
Provider Sponsored Funds
Mineworkers PF
Anglo American
Etc.
GEPF
Eskom
SALARY PER ANNUM (000S)
75
Compulsory
National Fund
SOAP
0
9.4m (3.9m)
8.3m (3.7m)
9.3m (3.8m)
2.0m (1.6m)
7.0m (3.6m)
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Government View - Risk
Voluntary
150
National Risk Pool Basic Benefit Package
SALARY PER ANNUM (000S)
75
12
SOAP
0
9.4m (3.9m)
8.3m (3.7m)
9.3m (3.8m)
2.0m (1.6m)
7.0m (3.6m)
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Alternate View - Risk
Please note that the numbers used in the left
hand column for the threshold levels are
illustrative should not be seen as definitive
VOLUNTARY
150
Risk Equalisation Mechanism Basic Benefit Package
SALARY PER ANNUM (000S)
75
National Fund
Mineworkers PF
Anglo American
Provider Sponsored Funds
Etc.
GEPF
Eskom
12
SOAP
0
9.4m (3.9m)
8.3m (3.7m)
9.3m (3.8m)
2.0m (1.6m)
7.0m (3.6m)
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What can be expected ?

• Higher focus on social reforms
• National Health Insurance
• Extension of Social Grants
• Unemployment Relief
• Education
• A global re-evaluation of the DC / Chilean
  personal account model due to the global economic
  crisis
• Ongoing research and analysis
• Incremental reforms

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Old Mutual Financial Wellbeing Programme

• Offering a menu of services to trustees,
  employers and members
• On the Money Financial Education workshops
• Financial Health Assessment
• Decision Making Tools
• Consultation Advice

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Financial Education

• The Secret of the LionEat first, live on the
  rest!
• The Secret of the LeopardIf you cant dream it,
  you cant do it.
• The Secret of the ElephantLearn what you earn,
  know what you owe, comprehend what you spend!
• The Secret of the RhinoCharging down your debt
  your biggest financial threat!
• The Secret of the BuffaloProtecting and
  investing your wealth

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Now this is not the end. It is not even the
beginning of the end. But it is, perhaps, the end
of the beginning.   Winston
Churchill