Retirement funds negotiate lower-cost pensions
Trustees secure lower institutional rates offered to big investors
Retirement funds are securing pensions at significantly lower costs than those you will be offered as an individual when you need to secure a monthly income after you stop working. These lower costs - anything from 0.6% to 0.9% a year - will give you a higher pension or an inflation-linked income for longer in retirement. David Gluckman, chairman of Sanlam Umbrella Fund's investment committee and head of special projects at Sanlam Employee Benefits, said funds' default pensions or annuities could save members about one percentage point in costs a year. Alexander Forbes says its new retirement income product, available as a default annuity option for funds, saves on average 0.63 percentage points on costs when compared to other annuities you, as an individual, can get from other providers. Funds are reporting these outcomes ahead of the March 2019 effective date for regulations that will force trustees to choose suitable annuities for retirees rather than leaving members to find thei...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.