Some of the highlights from survey concerns suspended contributions, a decrease in fund members and greater focus on wellness. It also notes the impact of the default regulations introduced in 2019.
Sanlam’s 40th Benchmark Survey, published on 22 June, shows the deep impact that COVID-19 had on the retirement industry. with 27% of stand-alone retirement funds and 41% of umbrella funds’ employers having suspended retirement fund contributions last year. This resulted in an average suspension across all fund types of 4.5 months.
Retirement benefit counselling
Of great interest to independent advisers in the retirement space should be the fact that 69% of stand-alone funds indicated that they had made greater use of retirement benefit counselling. Since the introduction of the default regulations in 2019, stand-alone funds providing advice at retirement had increased by 38%.
A positive outcome brought on by the pandemic was the increased propensity of employers to focus on the overall well-being of the employee. Half of the stand-alone funds and 36% of participating employers of umbrella funds believe that a holistic integrated health and financial wellness programme delivers higher productivity and employee satisfaction. Other funds agreed that both health and wellness programmes were critical but addressed it through separate programmes.
Members were impacted by the financial crises brought on by the pandemic. One in three funds experienced a reduction in workforce through retrenchments and liquidations. In addition, members had also experienced a reduction in expected annual increases, a reduction in current pay or had been forced to take sabbaticals without pay. Just under 80% of funds indicated that members experienced at least one of the above.
Click here to read the media release from Sanlam on the survey.