Johannesburg – More than half (60%) of pensioners did not believe their savings were sufficient to last them the rest of their lives, a new survey released on Thursday found.The 2010 annual Sanlam survey of the local retirement fund industry and its members showed 80% of retirement funds did not provide post-retirement medical aid, and that 50% of pensioners faced increasing responsibilities such as dependants, while 29% still had debt.

The findings were “extremely worrying” given that while the respondents polled were actively saving for retirement or had done so in the past, they were not doing enough, CEO of Sanlam employee benefits Paul Myeza said.

“If those who are currently saving are doing so inadequately, and it is well known that many, many South Africans aren’t saving at all, then we are facing a national crisis that needs to be urgently addressed by legislative channels.”

Myeza said the country’s youth “should learn from the mistakes” made by current pensioners and ensure a secure retirement.

In addition to the 300 trustees and principal officers polled this year and in previous years, the 2010 survey included a sample of 754 active members of retirement funds and 250 pensioners who used to contribute to retirement funds.

The survey found 50% of retirement fund members interviewed believed they were on track for their retirement planning. However the average contribution from members’ monthly salaries was well below the recommended level of 15%, indicating a general lack of awareness of their actual situation.

‘Concerning‘

The total employer and employee contributions was shown to be an average of 11.7%, marginally above 2009′s level at 11.3%, yet still falling short of the recommended 15%.

Self-employed respondents showed their retirement contributions were significantly less, at an average of four percent of their salary per month.

According to Myeza, active retirement fund members appeared to have distorted views of their retirement planning.

“It is concerning that so many members believe they are putting enough away for their retirement, yet the reality is that they are falling far short of what they will need to maintain their current lifestyles.”

The fact that the ramifications of poor retirement planning were embodied by so many current pensioners was distressing, with more and more elderly still burdened with debt and dependants.

“Yet the likelihood of this situation becoming a reality is still being disregarded by those who have the time to do something about it.”

He said 32% of members had never reviewed their portfolio construction, while 49% of respondents interviewed did not understand how market movements could affect their fund.

A total of 43% were unaware of how their money was invested and 53% were not interested in learning how to invest their retirement fund effectively.

“In addition, 69% of members could not name one of their retirement fund trustees, while 33% were not aware that they could nominate trustees,” Myeza said.

- Sapa