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Retirement Funding in South Africa 2019

  • ID: 4774117
  • Report
  • Region: Africa, South Africa
  • 107 Pages
  • Who Owns Whom
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FEATURED COMPANIES

  • Allan Gray (Pty) Ltd
  • NBC Holdings (Pty) Ltd
  • MORE

Retirement Funding: The South African retirement funding sector, with assets in excess of R4.26-trillion, has the fifth highest assets-to-gross domestic product ratio in the world. However, less than 10% of retirement fund members are able to maintain their standard of living when they stop working and 41% of economically active South Africans have not made any provision for their retirement. Total membership of retirement funds rose from 16.6 million to 16.9 million in 2017, while total retirement fund contributions increased by 5.06% and total benefits paid decreased by 3.47% year-on-year.

Changing Regulations: On 1 March 2019, amendments to the Pension Funds Act came into effect. These seek to ensure that pensioners have enough money to live on in their retirement by making it mandatory for funds to provide their members with counselling on retirement and to offer pension options that are affordable and appropriate. The reforms require retirement funds to improve fee disclosure and provide cost-effective annuity strategies for their members. A proposal by the ANC to introduce prescribed investments for pension funds has been met with some resistance. Several commentators have warned that pension funds could collapse if the government is allowed to dictate to fund managers how to invest retirement fund assets.

Pensions Under Pressure: High levels of poverty and unemployment make adequate provision for retirement difficult for many South Africans, while increased longevity is one of the main factors contributing to the unsustainability of post-retirement income provision. Role players report that returns on investments of the average balanced fund remain on a downward trajectory.

Report Coverage: This report is on retirement funding and provides information of size and state of retirement funding in South Africa, on the continent and internationally as well as the factors influencing the sector. There are comprehensive profiles of 27 public and private companies in the sector. These include the Public Investment Corporation, which manages the Government Employees Pension Fund, with 1.27 million members and assets under management totalling around R1.8-trillion. There are profiles of notable private sector players such as Old Mutual, which has significantly restructured and Alexander Forbes, which has undergone senior management changes.

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FEATURED COMPANIES

  • Allan Gray (Pty) Ltd
  • NBC Holdings (Pty) Ltd
  • MORE

1. Introduction

2. Description Of The Industry
2.1. Industry Value Chain
2.2. Geographic Position

3. Size Of The Industry

4. State Of The Industry
4.1. Local
4.1.1. Corporate Actions
4.1.2. Regulations
4.1.3. Enterprise Development and Social Economic Development
4.2. Continental
4.3. International

5. Influencing Factors
5.1. Social Security System
5.2. Economic Environment
5.3. Retirement Reform
5.4. Technology, Research and Development (R&D) and Innovation
5.5. Labour
5.6. Complaints and the Office of the Pension Funds Adjudicator
5.7. Environmental, Social and Corporate Governance (ESG)

6. Competition
6.1. Barriers to Entry

7. SWOT Analysis

8. Outlook

9. Industry Associations

10. References
10.1. Publications
10.2. Websites

Appendix 1
Types Of Funds Subject To The Pension Funds Act

Appendix 2
Summary Of Notable Players

Appendix 3
Market Indices and Statistics as at 31 December 2018

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  • Absa Asset Management (Pty) Ltd
  • AHI Asset Management (Pty) Ltd
  • Alexander Forbes Investments Ltd
  • Allan Gray (Pty) Ltd
  • Aluwani Capital Partners (Pty) Ltd
  • Argon Asset Management (Pty) Ltd
  • Coronation Fund Managers Ltd
  • Foord Asset Management (Pty) Ltd
  • Futuregrowth Asset Management (Pty) Ltd
  • Investec Asset Management (Pty) Ltd
  • Kagiso Asset Management (Pty) Ltd
  • Marriott Asset Management (Pty) Ltd
  • Mazi Asset Management (Pty) Ltd
  • Mergence Investment Managers (Pty) Ltd
  • Momentum Outcome-Based Solutions (Pty) Ltd
  • NBC Holdings (Pty) Ltd
  • Oasis Group Holdings (Pty) Ltd
  • Old Mutual Investment Group (Pty) Ltd
  • Prescient Investment Management (Pty) Ltd
  • Prudential Portfolio Managers (South Africa) (Pty) Ltd
  • Public Investment Corporation SOC Ltd
  • Sanlam Multi Manager International (Pty) Ltd
  • Sesfikile Capital (Pty) Ltd
  • Stanlib Asset Management (Pty) Ltd
  • Sygnia Asset Management (Pty) Ltd
  • Taquanta Asset Managers (Pty) Ltd
  • Truffle Asset Management (Pty) Ltd
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