Global consultant Mercer details perils facing SA’s pension system
Pensioners on average receive the lowest income of all countries that have a functioning pension system, according to consulting firm's index
SA’s pensioners on average receive the lowest income of all countries that have a functioning pension system, according to the 2018 Mercer Melbourne Global Pension Index. Mercer, the global consulting firm whose index measures the retirement income systems for 34 countries, says SA’s system is not sustainable because it does not cover enough people or pay a decent income.
The average net pension replacement rate — which measures the percentage of income that a working individual will get when they retire — sits at just 17% of their current earnings. SA is the worst performer on this indicator. Mercer recommends that to build a world-class pension system, countries must “ensure the right balance between adequacy and sustainability”. So what could the solution be for a country like SA that does not have enough of both? Mercer says its researchers recommend that, among other things, the country introduces a minimum level of mandatory retirement contributions or increase the leve...