• Bruce Cameron

Retirement capital of SA women is woefully inadequate

Alexander Forbes recently released the first major research on the financial survival of pensioners of retirement schemes in SA – and it does not make happy reading for women. This research was done before the Covid-19 outbreak and Moody’s downgraded South Africa. The situation now is likely to be far worse.

Women in retirement are far worse off financially than men. The reasons include insufficient contribution rates to retirement funds, breaks in careers to raise a family, the glass ceiling and, in retirement, the fact that they live longer than men.

Incidentally, the World Economic Forum’s 2018 Global Gender Gap Report has South Africa in 19th place out of 149 countries. Things are getting better for women, but they are still far from acceptable.

This is backed by research undertaken by Alexander Forbes on its own retirement book, the largest in South Africa.

John Anderson, an actuary and Alexander Forbes’ head of strategic development, says the proportion of women in higher-earning positions has increased over the last decade.

He says this is likely to be a result of changes in the type of work given the advancement of technology, cost-of-living changes generally making it necessary for as many family members as possible to work and changes in the environment to encourage and embrace diversity and equality in the workplace.

“We are also seeing many more women being appointed to boards of companies as well as being appointed as CEOs. The portion of women in the R960,000-plus salary band is now seven times higher than in 2010.”

More and more retirees and fund members are now female.

Anderson says female fund members have increased by about 17% in the last seven years, from 39.31% in 2012 to 46.04% in 2019.

Women now dominate membership in the personal services, professional and business services and in the retail, wholesale and hospitality sectors. Their lowest membership of women is in the mining and construction sectors, which are still dominated and likely to remain dominated by male members.

Anderson says that the research into retirees’ finances shows that the amount of money with which women retire has grown significantly from 1998 to 2018.

Women are ahead in the R600,000 to R1,500,000 retirement capital group at retirement. In the R20-million-plus group, where they had no representation before, they now hold 25% of the assets.

Apart from the one group, in all the other retirement savings sectors men are ahead. The lowest sector for women is the R10-million to R20-million group, where they hold only 21% of the capital.

Women members, in the build-up to retirement, are still disadvantaged in other ways. For example, by having babies and/or raising a family, getting divorced and looking after children, resulting in breaks in their careers or the ability to work full-time.

And then comes retirement, where they live longer on average than men. At age 60 the expected average age of death for women is 84 and for men it is 79.