Longevity risk and retirement

No one knows what the future holds for South Africa’s millennials, or “Born-free” generation, but statistics have shown that everyone will need to rethink their approach to saving for the future. South Africa’s young savers will have to take on higher risks to generate higher returns – something that goes against their often conservative investment outlooks – while battling the twin evils of a low-return environment and unemployment. They also face longevity risks.

PFA investigates causal event charges

Ms NA Msomi of Ormonde made a complaint about the more than R45 000 causal event charge that would be imposed by a retirement fund if she opted to transfer from one fund to another. The Office of the Pension Funds Adjudicator took note of the first respondent’s resolve to stop the practice of deducting causal event charges, particularly in circumstances where a member simply wishes to transfer to another investment vehicle within the same fund.

Costs and passive investing

Cost is a huge differentiator between active management and passive management. Active managers believe markets are not efficient and they can exploit mispricings – so one is paying for the manager’s expertise and experience. Passive managers believe that the market is efficient and therefore one cannot beat the market. As a result, passive is significantly cheaper than active investing – sometime 10 times cheaper depending on the strategy.

The role of legislation in retirement fund savings

The UK government plans to enrol millions of people into a workplace retirement scheme, and while this might seem like a good idea for our workforce, South Africa must think twice before implementing first-world principles in a third-world economy. This doesn’t mean such a retirement scheme is outside our grasp, it only means there are still many hurdles to overcome before such a scheme would be viable in SA.
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Employers must do more - Sanlam Benchmark Survey

The ability to retire and a financially secure retirement are within reach with the help of employers. That was the recommendation coming from the 2013 Sanlam Benchmark Survey. Retirement Fund Trustees, financial planners and retirement advisors should all pay attention to the recommendations from the Sanlam Benchmark Survey

Beat the myth in order to retire well

Official inflation figures make a poor benchmark for retirement planning and could lead to an old age in financial distress. It’s a mistake to assume that if your investments keep pace with official inflation you…

Beware of reckless conservatism

In a release distributed by the Association for Savings and Investment South Africa (ASISA) earlier this year, Leon Campher, ASISA CEO, noted that investors still hold the bulk of their money in domestic fixed interest…