Nathalie Burrows, Editor at EBnet
The 44th Sanlam Benchmark Symposium held yesterday continued its legacy as a cornerstone of thought leadership and innovation in the employee benefits industry. The agenda was jam packed with the latest research on how retirement funds in South Africa are doing – from both a benefits and a member experience perspective. The survey, which covers both stand alone and umbrella funds, revealed some interesting trends, like for example, the dramatic increase in the number of retirement funds that have included critical illness benefits in their basket of benefits (from 8% in 2019, to 49% in 2025 – in umbrella funds).
But what was really meaningful was that these stats were packaged in the context of real problems and challenges that retirement funds and other employee benefits like healthcare and wellness are experiencing.
When one understands the scary cancer (and other non-communicable diseases) stats shared by Dr Richard Friedland, the Group CEO of Netcare, then the increase in the benefits covering these diseases makes sense. But it’s about more than just covering the benefits, it’s about customising and personalising care to meet each individual where they are in the journey – be it a journey of health or wealth. Dr Friedland advocated flipping the doctor’s script (s’cuse the pun) from “What’s the matter with you?” to “What matters to you?” thereby increasing engagement exponentially – driving a narrative that gets the individual involved in their wellness journey.
The finding that 63% of contributions is spent on hospitals and specialists sparked Dr Nkateko Msimeki from AfroCentric to pose the question: Do we have a healthcare system or do we have a sick care system? And is this system not completely unsustainable when considering that the benefits of proactive wellness and prevention far outweighs the costs of curative care.
Nzwa Shoniwa, Managing Executive of Sanlam’s Umbrella Solutions, pointed out that over 50% of stand alone funds are now considering moving into an umbrella fund. I will agree with the comments around having to deal with the increasing compliance burden making umbrella funds seem hugely attractive to even those stand alone funds that have held out for so long.
More concerningly was the revelation that 48% of individuals use Google for their financial advice. In a two-pot era, where an annual opportunity to take a withdrawal from your retirement fund means increased interaction with the fund, which we’re seeing leads to better understanding of the fund and its benefits, why are members not seeing the value of financial advice?
One of the key talking points of the day was around the need for education – but not just the standard stuff that all retirement funds send, rather targeted communication at the right time to meet unique needs. And with the proliferation of data on members, targeted and personalised communication becomes possible.
A panel discussion around retirement reform in South Africa probed some difficult conversations with panelists from ASISA, National Treasury, SARS, the Sanlam Umbrella Fund and SADTU. Questions from the audience were on unclaimed benefits and why is SARS taxing savings pot withdrawals at marginal rates. (The latter question after Edward Kieswetter, the Commissioner from SARS, confirmed that to date, R57 billion has been paid out in two-pot withdrawal benefits, with R15 billion of that being paid to SARS as tax.)
In a country where every breadwinner has an average of 4 people relying on them, the problems and delays caused by incomplete forms can cause real financial hardships for families. A great suggestion by Renier van Gijsen, Head of Pricing at Sanlam Group Risk: let’s standardise all claim forms across the industry. (So simple, but very effective in enabling members to understand, right?)
And finally the day wrapped up with a debate on whether impact investing is a choice between investment returns OR impact on society (many investors believe these investments can’t deliver both). Impact across the factors of Environmental, Social and Governance criteria should be a critical lever that asset owners pull to meet the sustainability needs of our time, and future society.
All in all, a fabulous day of excellent content, rubbing shoulders with the who’s who, and reflecting on what is important to the ultimate benefactor of all we do: the individual member or investor.
ENDS
