| By Prabashini Moodley, The Old Mutual Thought Leaders Forum saw industry leaders sharing their perspectives on the South African retirement industry, and the need for ongoing reforms and innovation.Speaking in the final plenary session, titled Visionary Leaders Share Their Perspectives, Old Mutual Group CEO Iain Williamson underlined the impact of those retirement outcomes. ‘The topic of good retirement incomes touches everything from unemployment to inequality, to our human-centred approach to real human needs, to balancing long- and short-term needs, etcetera,’ he said. ‘The big take-out from the first panel [which focused on South Africa’s retirement system], was: “Boy, we’ve got a lot of work to do!” But we heard some really good solutions– and the Two-Pot Retirement System is part of that, reducing leakage from the system.’‘It was very clear from all the panels that the bottom line is the fund member,’ added Nhlanhla Nene, Chairman of the Old Mutual SuperFund. ‘At the end of the day, it’s about getting together – regulators, fund managers, SuperFund, all of us – and looking for solutions that are in the best interests of the member.’However, Nene said that the Two-Pot Retirement System was the first step in a long journey of reforming South Africa’s retirement system and improving retirement outcomes while expanding access to the retirement system. ‘It’s going to be a long journey, but it has begun,’ he said.A whole-life approachOld Mutual Corporate Managing Director Prabashini Moodley told delegates at the Old Mutual Thought Leaders Forum that poor retirement outcomes, coupled with limited access to retirement funding, represented a dual problem in South Africa’s retirement system. ‘But we also have a dual economy, and we have to acknowledge those realities,’ she said.The retirement system in its current form may not be fit for purpose, Moodley added. ‘We’re overseeing a system that was built in the 19th century, when life expectancy was much lower than the retirement age,’ she said. ‘I think it’s time to retire the concept of retirement. Income for life seems to be the way of the future. The world of work is changing. It’s about skills now. The future of work is here, and it’s about thinking of life and work in less of a linear way.’Williams agreed, pointing to Old Mutual’s member-for-life approach. ‘Ultimately, we’re here to solve real, human problems with financial solutions,’ he said. ‘But it starts with the human problems and helping people to live the best life that they can.’One of the solutions discussed at the Old Mutual Thought Leaders Forum was Collective Defined Contribution (CDC) schemes, which could bridge the gap between defined benefits (DB) schemes and the defined contributions (DC) system currently in use in South Africa.The CDC system eliminates what Williamson describes as the ‘artificial divide between pre-retirement and post-retirement’. Old Mutual Investments Managing Director Khaya Gobodo, who admitted to being a recent convert to the CDC concept, said that one of its benefits was that it enabled retirement fund members to invest at higher returns for much longer. ‘If you think about the major levers to generating long term outcomes, how long you invest and the returns you generate are the two most significant,’ he said. ‘This innovation will generate substantially better outcomes without requiring people to contribute more.’Continued engagementMoodley concluded by calling on all stakeholders to continue having the debates and conversations that will drive the retirement industry forward. ‘To change things, sometimes we need to reach a tipping point,’ she said. ‘We need a critical mass. The more we engage, the more we talk, the more we get different perspectives, the closer we’ll move to more innovative solutions.’The past few months have been all about the Two-Pot Retirement System, which aims to improve the retirement outcomes of fund members. We know that retirement outcomes in South Africa aren’t what they should be. The question is: how do we solve that? The 2024 Old Mutual Thought Leaders Forum brought leading local and international experts and industry stakeholders together to co-create answers to that question. |
| The exclusive event, held in August, built on Old Mutual’s surveys of pre-retirees, post-retirees and small businesses, as well as on global research from partners like LIMRA and Mercer, and our own thought leadership. A recording of the day’s panel discussions, along with a wealth of related content, is available for you to watch, read, and think about. |
| I invite you to join the conversation, and to find out more about how we’re shaping a new retirement industry, future-fit for the new world of work. |
| Prabashini Moodley Managing Director Old Mutual Corporate |
Is it time to retire “retirement”
Nyakaza Media Solutions - Yo School Magazine
Nyakaza Media Solutions, founded to empower schools, helps learners research, write, and publish newsletters, bulletins, and maintain websites. With a mission to promote dialogue on issues affecting young people, the organisation encourages learners to celebrate excellence, embrace growth, and strive for greatness. Nyakaza Media Solutions aims to foster better individuals and future South African leaders through positive and productive behaviour.