The report, released on Thursday, surveyed 800 workers between the ages of 18 and 64 who did not currently have a pension or provident fund, to gauge how satisfied they were with their financial provision for retirement.
Craig Aitchison, a general manager at Old Mutual Corporate, said in a statement that government had committed to promoting savings by introducing retirement reforms that would encourage employees to save and provide adequately for their retirement.
One proposed solution was the introduction of legislation that would make it compulsory for every employee who did not currently belong to a pension fund, to belong to a government-sponsored fund.
“The survey revealed that 51 percent of respondents believed employees should not be allowed to opt out of such a fund, while 49 percent indicated they should be able to,” Aitchison said.
He said those respondents who selected to opt out were mainly driven by the principle of having the right to choose (55 percent), followed by a concern that they might not be able to afford the contribution due to limited monthly income (18 percent).
“In comparison, only eight percent cited a lack of trust in government. It is encouraging that this is not seen as a leading reason for why respondents should be allowed to opt out of the fund.”
He said while respondents were split on whether they would want to opt out or not, two in three said they would be likely to join such a fund if it was introduced.
“This suggests that South Africans do see the benefits of being part of such a fund.”
Aitchison said full-time and part-time employed respondents were significantly more likely to choose to be part of the fund, while self-employed respondents were less likely to do so.
Respondents were also asked how much they liked the idea of the implementation of an employer-sponsored pension fund.
“A significant 67 percent indicated they liked it either ‘very much’ or ‘somewhat’.”
When asked which fund they are more likely to join — assuming the benefits are the same for both — 49 percent selected an employer-sponsored pension fund, while only 15 percent chose the government-sponsored fund.
“We believe this choice is influenced by people wanting to participate in the investment decision-making process, and consumers may feel they are less able to influence a government-sponsored fund than an employer-sponsored fund.” Aitchison said.
He said the survey highlighted the need for government to implement retirement reform initiation.
One of the findings that related to this was that the majority of respondents held a bleak outlook of their current financial situation, with 52 percent stating that they were not satisfied at all with their current retirement provision.
Only seven percent reported being completely satisfied.
In addition, almost one in five revealed that they would supplement their retirement funds by looking for another job in retirement.