Business is recovering, investments are on track and there is positive sentiment regarding National Treasury’s proposed retirement industry reforms. These are just three important messages that came from the 2022 Old Mutual SuperFund Summit. Those … and the fact that South Africans in general aren’t saving enough towards their retirement.

‘What an amazing two-and-a-half hours!’ That's how Malusi Ndlovu, Director of Large Enterprises at the Fund’s sponsor, Old Mutual Corporate, described the key retirement fund industry event. Referring to the current challenging environment, he added: ‘It’s good to be with a fund that isn’t just dealing with operational impacts of the past two years but is also investing for the future.’

Important numbers you should know about the SuperFund retirement fund

Operational challenges were addressed openly at the summit, which gave attention to the 30% increase in withdrawal claims and dramatic 74% increase in claim volumes during the 2020/21 financial year. During the same period, 1 225 participating employers – or 20% of SuperFund’s total employer base – requested payroll relief, as they struggled under economic pressures due to the Covid-19 lockdown.

However, South Africa's unexpectedly quick post-pandemic economic recovery is reflected in the Fund’s December 2021 contributions – they were R1.8 million below the February 2020 tally and a significant improvement on April 2020 when contributions were R54.4 million below the February 2020 mark.

Old Mutual’s robust financial health – coupled with SuperFund’s sheer size – enabled the Fund to weather the storm over the past two years. Its scale is immense:

• 490 802 members,
• 5 947 participating employers as of 30 June 2021,
• and growth of R19 billion in assets (representing a 16% increase) in just one year.

‘That’s bigger than most retirement funds out there,’ Ndlovu said, ‘and it highlights the scale, economies and efficiencies that SuperFund can provide. These considerations have become paramount in business and SuperFund is ideally placed to help organisations to build this into their employees' retirement fund offering too.’

What Old Mutual expects of government's proposed two-pot retirement-fund system

National Treasury’s proposed two-pot system for retirement savings also came under the spotlight. Although the proposals are still exactly that – proposals – a snap poll among the summit’s online audience showed that two thirds agree that it’s likely to lead to better retirement outcomes for South Africans.

The urgency to help South Africans provide for their retirement was brought home in a short video clip that forms part of a social experiment conducted by Old Mutual. Typical families were asked to fill a shopping trolley with all the groceries they need in a month. What they didn’t know, is that the item prices were adjusted to what they’d be when the breadwinner retires. All the families were over budget, some by 600% or more.

‘This was the highlight of the summit for me,’ said Ndlovu. ‘It really brought home the reality of why we do what we do: to help our nearly 500 000 SuperFund members reach a comfortable retirement, and to help employers do the right and responsible thing for their employees.’

An update on SuperFund's underlying funds

SuperFund’s underlying investment portfolios have also recovered considerably and Ndlovu specifically highlighted the performance of its default investment funds. The positive results delivered by Old Mutual Multi-Managers and the default Absolute Growth Portfolios were pointed to at the summit.

‘The governance and oversight exercised by the Management Board's Investment Subcommittee continue to be robust, future-fit and relevant, which is always reassuring and encouraging. I know that they’ve already begun to prepare for the two-pot system so that they're not caught on the back foot when it’s introduced,’ he said.

Ndlovu ended his summary with an invitation: ‘If you're not a member of SuperFund yet, if you’re saving for your staff through a standalone fund, with all the complexities that come with it, or through another umbrella retirement fund, why not join us?’ he said. ‘I, as one of SuperFund's 490 802 members, am very excited about the future, and I know that my retirement is in the right hands.’