National Treasury published a series of papers between 2012 and 2015 on the shortcomings of the annuity market in South Africa and draft default annuity regulations to address these. Just Retirement, a UK-listed specialist annuity provider, entered South Africa as a direct response to these challenges with a view to improving customer outcomes in retirement. Today we announce the launch of a world-first Enhanced With-Profit Annuity. Read more
Living annuitants at risk of destitution
“South African retirees are hurtling towards destitution in their old age by blindly following the misguided ‘collective wisdom’ of the herd,” says Deane Moore, CEO of Just Retirement South Africa. Read more
The annuity revolution in South Africa
Labour unions and the National Treasury agree on the urgent need to improve the value for money of retirement solutions, but disagree on next steps. Deane Moore, CEO of Just Retirement South Africa, shares this sense of urgency: “The time has arrived for annuities to be revolutionised to improve customer outcomes. Living annuities only provide good value if you die early. Conventional guaranteed annuities require the poor and ill to subsidise the rich and healthy. And with-profit annuities have been subject to opaque insurer discretion.” Read more
What retirees want vs. what they are sold
In a recent survey conducted by specialist annuity provider Just Retirement South Africa, retirees stated a clear preference for income security in retirement, with no financial risk. However, when it comes to investing their retirement savings they act completely contrary to this. Read more
Ten innovative financial products launched in 2015
Cape Town – A number of new financial products were launched during the course of 2015, growing the range of choice that consumers have and improving their access to financial services. Here Moneyweb lists ten of the most innovative: Read more
Enhanced annuities: Improving member outcomes in retirement arrangements
Retirement reform came under the spotlight again when National Treasury issued its draft “Default Regulations and Explanatory Memorandum” on 22 July 2015. In this draft, boards of trustees of defined contribution fund arrangements are mandated to take responsibility to ensure that fund members are provided with appropriate annuity solutions at retirement. Read more
When should your living annuity client consider an enhanced annuity?
I’d like you to think about Jacob and Margaret – they have a lot in common. They both:
- purchased living annuities at retirement;
- are now 75 years old;
- have living annuity investment portfolios consistently earning 9% pa after all advice, investment and administration costs;
- need R14,500 per month to cover living expenses, increasing with inflation at 6% pa. To meet this:
- Jacob currently draws 8.7% pa from his living annuity of R2m.
- Margaret currently draws 7.9% pa from her living annuity of R2.2m.
Three critical questions to ask your client
I know just how much you need to get through when you meet with a client to find the right product to meet their retirement needs. In a country with a relatively high prevalence of smoking and an obesity epidemic, the state of your client’s health could be at the top of your discussion list.
Enhancing the nutritional value of annuities
The cost of a basic monthly ‘healthy food basket’ in South Africa is R866 for one person. A more diverse and nutritional food basket, with greater quantities of animal protein, fruits and vegetables, costs 24% more – R1072 per month.*
Living longer, living sicker
A report released by Statistics South Africa (StatsSA) in July this year shows that life expectancy (from birth) in South Africa is currently estimated to be 61 years for males and 64 years for females, eight years longer than the estimated life expectancy in 2002.