Click here to learn more about the Old Mutual SuperFund.<\/strong><\/a><\/li>\n<\/ul>\n\u201cThe Old Mutual 2021 Savings and Investment Monitor research report found that few people can afford to save for a rainy day or have some semblance of an emergency fund in place,\u201d says Ndlovu.<\/p>\n
\u201cAsked to assess their available funds in the face of retrenchment or loss of income in 2021, only a third of consumers would have enough money to last a month.\u201d<\/p>\n
He says equally concerning is that when the widespread retrenchments induced by the lockdowns took place at the start of the pandemic, the research indicates that 54% of people with savings had to dip into it just to make ends meet \u2013 up from 23% in 2019.<\/p>\n
Many South Africans also reported having to cut back on their retirement fund or annuity contributions, while almost a third of the sample had no formal retirement products at all.<\/p>\n
What does this predicament mean for business leaders?<\/h3>\n
\u201cThis situation leaves many, if not most employees, with insufficient income at a time in their lives when they should be looking forward to a well-earned break from a lifetime of actively contributing as productive members of society,\u201d notes Ndlovu.<\/p>\n
\u201cA sound retirement fund therefore provides employers with a valuable tool to enhance their employee wellness efforts and attract and retain the best employees, among others.\u201d<\/p>\n
He emphasises that in the wake of perennially volatile economic conditions, the need has never been more urgent.<\/p>\n
Old Mutual recently conducted a social experiment whereby eight typical SA families were asked to fill a shopping trolley with all the groceries they need in a month.<\/p>\n
What they did not know was that the item prices were adjusted to what they would be when the breadwinner retires.<\/p>\n
The budget was similarly adjusted for the projected income at retirement, based on the current savings trajectory. Alarmingly, every family was over budget \u2013 ranging between 100% and 800%.<\/p>\n
\u201cIt\u2019s scenarios like the ones depicted in the social experiment that provide a true reality check for the many who are not on track with their retirement savings.”<\/p>\n
“While it remains an ongoing challenge that needs to be addressed sooner rather than later, it\u2019s also far from all doom and gloom,\u201d says Ndlovu.<\/p>\n
He says limiting the retirement crisis for workers essentially relies on two elements \u2013 more people saving for retirement and more employers starting retirement funds for their employees.<\/p>\n
While the immediate prospects of retiring comfortably may for many employees appear to be rather bleak, Ndlovu says the good news is that by empowering business leaders and employers to make financially savvy, informed decisions today, there are still retirement solutions designed around ensuring a successful retirement for all.<\/p>\n
What does a successful retirement scheme look like?<\/h3>\n
In Old Mutual\u2019s vast insights, there are no hard and fast rules when securing the best possible retirement outcome for all employees.<\/p>\n
Considering the diverse, multi-generational workforce \u2013 all with differing retirement and savings goals and aspirations \u2013 revisiting and reassessing current retirement schemes is always an onerous and often overwhelming task.<\/p>\n
In this context, Ndlovu points out that any high-performing retirement scheme should be based on the following factors:<\/p>\n
1. Maximised contributions<\/strong><\/p>\nMaximising members\u2019 actual contributions to the savings pool is key to ensuring a comfortable retirement.<\/p>\n
Employers must aim for the ideal scenario for the average employee which is a minimum pension of 75% of their last income at retirement.<\/p>\n
For example, if an employee\u2019s last salary is R40,000 a month, a retirement income of R30,000 is needed to maintain their standard of living.<\/p>\n
This means employees must be informed where they stand in relation to the target and be empowered to save more.<\/p>\n
2. Reduced complexity and cost<\/strong><\/p>\nConsider more efficient options that reduces the complexity and number of advisors needed to manage a scheme, irrespective of the number of employees in the fund.<\/p>\n
With a standalone fund, you need an auditor, actuary, a consultant and a host of other service providers to advise you.<\/p>\n
This increases the costs to the employer but more so to the member who ultimately pays for these services and endure the long-term impact on their retirement savings.<\/p>\n
An umbrella fund means that the cost can be spread over a larger pool of contributors<\/p>\n
3. Reduced time and effort<\/strong><\/p>\nThe administrative burden of companies having to appoint a board of trustees from within the organisation to meet the onerous governance and compliance requirements takes away from business\u2019s core competency and efficiency.<\/p>\n
Often the trustees do not have the expertise nor capacity to ensure the fund remains efficient or optimised.<\/p>\n
In addition, the raft of continuous changes to the retirement fund legislation places a further burden on the trustees.<\/p>\n
4. Geared for growth<\/strong><\/p>\nEmployers must have the option of selecting a combination of investment portfolios that suit their specific workplace retirement fund needs and can ensure optimised growth and flexibility.<\/p>\n
Investment options must be suited for each type of worker and their appetite for risk.<\/p>\n
The fund should have a suitable mix of asset portfolios shared across the board to pick and choose the suitable investment vehicles.<\/p>\n
The Solution<\/h3>\n
Ndlovu says that in recent years there has been a big move globally from stand-alone funds to multi-employer umbrella funds such as the Old Mutual SuperFund.<\/strong><\/a><\/p>\n\u201cUmbrella funds provide employers with the most efficient way of giving their employees access to sufficient retirement savings, while at the same time allowing them to focus on running and growing their business by reducing the administrative load often involved in managing a stand-alone fund,\u201d he says.<\/p>\n
He says SuperFund provides employers with the flexibility to structure employee retirement and risk benefits, empowering them to provide employees with the peace of mind that their financial future is being looked after and that their families are financially protected.<\/p>\n
It offers one holistic approach that is simple, transparent, flexible and cost-effective.<\/p>\n
Let SuperFund help you #powertheirnext beginning and give your employees the best possible chance of a comfortable retirement.<\/em><\/p>\nOld Mutual Life Assurance Company (SA) Limited is a licensed FSP and Life Insurer.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"A sound retirement fund provides employers with a valuable tool to enhance their employee wellness efforts and attract and retain the best employees, among others.<\/p>\n","protected":false},"author":57,"featured_media":609606,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10459],"tags":[1110],"class_list":["post-609598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news","tag-old-mutual"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/609598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/57"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=609598"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/609598\/revisions"}],"predecessor-version":[{"id":609604,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/609598\/revisions\/609604"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/609606"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=609598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=609598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=609598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}