A very low percentage of people in our country can afford to retire with appropriate cover
Many people within South Africa live from day to day with little planning for the future – this, of course, is not entirely the fault of the people as our economy continues to struggle. However, the economy shouldn’t be allowed to force its people out of dignity or a good future. In order to find out more, we sat down with Shakeel Singh, CEO of Sanlam Umbrella Solutions.
Please tell us more about the Sanlam Umbrella Fund?
Umbrella funds are retirement funds where unrelated employers participate to benefit from economies of scale. The structure enables employers to offer employees packaged retirement savings and insurance.
What would you say is the biggest concern with regards to South Africans and their retirement funds/or their lack of retirement funds?
Disengaged people don’t pay attention to their savings. Less than 6% of South Africans can afford to retire with an appropriate level of income. To improve retirement outcomes we must improve members’ cumulative decisions over time by providing access to information and tools as well as support at key points in their lives.
Everyone is different, with different jobs, dreams and goals, how do you/ Sanlam come up with strategies for each individual in terms of affordability and when they’d like to retire?
Employers have flexibility of contribution rates and we allow members to make additional voluntary contributions on an ad-hoc or monthly basis. Employers can offer employees choice in terms of the level of life cover they wish to have.
Our investment choice options include smoothed bonus, absolute return, passive, Shari’ah, multi-managed and single manager funds. Members can even create their own share portfolios.
Can you please talk to us about the trustees of the Umbrella Fund – do they all work for Sanlam or are they independent?
Sanlam appoints 50% of the board and members elect other 50%.
Independent candidates are shortlisted by the Principal Officer taking into account qualifications, knowledge, and experience, on condition that candidates must be entirely independent of Sanlam. The independent trustees are then elected by the member-elected representatives of every Joint Forum.
What have you put in place to assist Sanlam clients in their retirement savings?
The tools and calculators on our app and portal are powerful. They guide members, step by step, when joining the fund and upon leaving. There are budgeting tools, tax calculators, replacement ratio calculators as well as the ability to obtain real-time annuity quotations. Our retirement benefit counsellors are also helpful; they cannot give advice but can explain what their options are.
Considering we are in the midst of the 4th Industrial Revolution, how important is it to Sanlam to continue innovating and offering clients better solutions?
The future will bring a number of disruptions that may fundamentally change the way we do business. The automation (including robotics) that we brought into our administration system has allowed us to manage our costs, the average annual administration fee increase has been under 2% since inception of the fund. Investment in technology is also about data integrity and protection against cybercrime.
What makes the Sanlam Umbrella Fund stand out above its competitors?
It isn’t just one thing that allows us to stand out from the crowd, it’s just that we put in a little more into everything that we do, and that adds up to something remarkable. The industry knows our administration platform is superior to what is currently out there. We led the pack on a number of industry firsts, including being the first commercial umbrella fund to offer members a fully interactive app, an institutionally priced in-fund living annuity as well as retirement benefit counselling services.
For more information on Sanlam Umbrella Fund, please email us at: Shakeel.Singh@sanlam.co.za
This article was extracted with the permission of Sanlam from Leadership Magazine