Speaking ahead of the launch of Sanlam’s Benchmark Survey on retirement later this month, Viresh Maharaj, chief marketing actuary at Sanlam Employee Benefits, says research indicates that the nature of longevity is not fully understood, appreciated and anticipated in current retirement planning.
Maharaj said life expectancy has increased by 20 years since 1950. This is a larger increase in the last 60 years than in the preceding 6 000, due to advances in medical technology, nutrition and public health systems.
The United Nations anticipates that, by the year 2035, the current population figure of 600 million people over the age of 65 will be 1.1 billion.
“What worked when retirement funds were conceptualised and implemented may not necessarily work today – and will definitely not work in 20 years’ time,” Maharaj said.
The impact of longevity also means people need to save more for retirement or spend less time in retirement.
Advances in anti-retroviral me-dicine, stem cell applications and nanotechnology were only going to increase the longevity curve, making it vital for the retirement funding structure to align its planning with these changes.
Maharaj said South Africa also faces a different dynamic, where pensioners were supporting children and grandchildren.
According to this year’s Benchmark statistics, 60% of pensioners have adult dependents and 23% have child dependents.
If people start saving earlier and the retirement age gets pushed out, it can go a long way in addressing the problem.