STEPHEN CRANSTON: The benefit of benefits
Good death and disability benefits are seen as a way to attract and retain talent
I have always believed that pension funds should stick to their core purpose of investing for a secure retirement. Yet in SA they are starting to resemble providers of life and disability insurance with some savings element thrown in — almost like an old-school universal life policy on a grand scale.With Covid, the pendulum has swung even further towards these risk benefits. According to a recent Alexander Forbes Hot Topics seminar, the increase in payouts on group life insurance has been as high as 115% among the large life offices between 2019 and 2020, and even the best experience was a 32% rise. Meanwhile, funeral policies — usually the high-margin cash cow of the assurers — have seen claims jump by as much as 103%.John Anderson, perhaps the most experienced benefit consultant still at Forbes, tells me that in most of the world, the trade-off between risk benefits and pension savings doesn’t take place. That’s because the cost of risk is not provided within a pension fund, but i...
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