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Retirement Funding
BY Carole Veitch
South Africa
30 May 2019
R 14 400.00 (ZAR)  
estimated $ 1 015.12 (USD) *
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Retirement Funding


The South African retirement funding sector, with assets in excess of R4.26-trillion, has the fifth highest assets-to-gross domestic product ratio in the world. However, less than 10% of retirement fund members are able to maintain their standard of living when they stop working and 41% of economically active South Africans have not made any provision for their retirement. Total membership of retirement funds rose from 16.6 million to 16.9 million in 2017, while total retirement fund contributions increased by 5.06% and total benefits paid decreased by 3.47% year-on-year.


Changing Regulations


On 1 March 2019, amendments to the Pension Funds Act came into effect. These seek to ensure that pensioners have enough money to live on in their retirement by making it mandatory for funds to provide their members with counselling on retirement and to offer pension options that are affordable and appropriate. The reforms require retirement funds to improve fee disclosure and provide cost-effective annuity strategies for their members. A proposal by the ANC to introduce prescribed investments for pension funds has been met with some resistance. Several commentators have warned that pension funds could collapse if the government is allowed to dictate to fund managers how to invest retirement fund assets.


Pensions Under Pressure


High levels of poverty and unemployment make adequate provision for retirement difficult for many South Africans, while increased longevity is one of the main factors contributing to the unsustainability of post-retirement income provision. Role players report that returns on investments of the average balanced fund remain on a downward trajectory.


Report Coverage


This report is on retirement funding and provides information of size and state of retirement funding in South Africa, on the continent and internationally as well as the factors influencing the sector. There are comprehensive profiles of 27 public and private companies in the sector. These include the Public Investment Corporation, which manages the Government Employees Pension Fund, with 1.27 million members and assets under management totalling around R1.8-trillion. There are profiles of notable private sector players such as Old Mutual, which has significantly restructured and Alexander Forbes, which has undergone senior management changes.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 7
4.1. Local 7
4.1.1. Corporate Actions 11
4.1.2. Regulations 12
4.1.3. Enterprise Development and Social Economic Development 15
4.2. Continental 16
4.3. International 18
5. INFLUENCING FACTORS 19
5.1. Social Security System 19
5.2. Economic Environment 20
5.3. Retirement Reform 20
5.4. Technology, Research and Development (R&D) and Innovation 21
5.5. Labour 23
5.6. Complaints and the Office of the Pension Funds Adjudicator 24
5.7. Environmental, Social and Corporate Governance (ESG) 25
6. COMPETITION 25
6.1. Barriers to Entry 26
7. SWOT ANALYSIS 27
8. OUTLOOK 28
9. INDUSTRY ASSOCIATIONS 28
10. REFERENCES 29
10.1. Publications 29
10.2. Websites 29
APPENDIX 1 31
Types of Funds Subject to the Pension Funds Act 31
APPENDIX 2 34
Summary of Notable Players 34
APPENDIX 3 36
Market Indices and Statistics as at 31 December 2018 36
COMPANY PROFILES 37
ABSA ASSET MANAGEMENT (PTY) LTD 37
AHI ASSET MANAGEMENT (PTY) LTD 39
ALEXANDER FORBES INVESTMENTS LTD 41
ALLAN GRAY (PTY) LTD 43
ALUWANI CAPITAL PARTNERS (PTY) LTD 46
ARGON ASSET MANAGEMENT (PTY) LTD 48
CORONATION FUND MANAGERS LTD 50
FOORD ASSET MANAGEMENT (PTY) LTD 54
FUTUREGROWTH ASSET MANAGEMENT (PTY) LTD 56
INVESTEC ASSET MANAGEMENT (PTY) LTD 58
KAGISO ASSET MANAGEMENT (PTY) LTD 60
MARRIOTT ASSET MANAGEMENT (PTY) LTD 62
MAZI ASSET MANAGEMENT (PTY) LTD 64
MERGENCE INVESTMENT MANAGERS (PTY) LTD 66
MOMENTUM OUTCOME-BASED SOLUTIONS (PTY) LTD 68
NBC HOLDINGS (PTY) LTD 70
OASIS GROUP HOLDINGS (PTY) LTD 73
OLD MUTUAL INVESTMENT GROUP (PTY) LTD 75
PRESCIENT INVESTMENT MANAGEMENT (PTY) LTD 79
PRUDENTIAL PORTFOLIO MANAGERS (SOUTH AFRICA) (PTY) LTD 82
PUBLIC INVESTMENT CORPORATION SOC LTD 85
SANLAM MULTI MANAGER INTERNATIONAL (PTY) LTD 92
SESFIKILE CAPITAL (PTY) LTD 94
STANLIB ASSET MANAGEMENT (PTY) LTD 96
SYGNIA ASSET MANAGEMENT (PTY) LTD 99
TAQUANTA ASSET MANAGERS (PTY) LTD 101
TRUFFLE ASSET MANAGEMENT (PTY) LTD 103