SA’s shallow savings pool is drying up, warns Liberty CEO
Unless drastic steps are taken to preserve SA’s savings, the mighty retirement fund industry faces a dwindling pool of assets, as new contributions to retirement funds fall in the face of rising unemployment and lower contributions by savers, says Thabo Dloti, the CEO of Liberty. “If you take out the benefit of being invested in financial markets, you’ll find the industry has been static for the past seven years and net new contributions are not growing. The stock is declining,” Dloti said after an employee benefits symposium hosted by the life insurer. Retirement reform was happening slowly, even though the Treasury was keen to increase the levels of savings by improving the current industry structure, Dloti said. Necessary reforms included introducing compulsory preservation and default options to reduce the cost of savings. “[Compulsory preservation] is going to require political will,” he said, adding that it was disappointing that trade union interference caused it to be postpo...
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