Company pension funds provide both risk and retirement benefits. Every time you make your monthly contribution, a portion of it first goes towards administrative costs and the risk component. Net contributions to the retirement savings component are only made after these two costs are deducted. And the more the costs, the less there’s available to put away in retirement savings.

The Covid-19 pandemic inevitably brought with it an increase in risk benefit cost as life insurers dealt with significantly higher claims than usual. But with the virus largely under control and not inflicting the widescale illness or deaths seen before, will these risk costs remain high, or perhaps return to pre-pandemic levels?

In early 2022, Old Mutual Corporate Consultants did an in-depth analysis of umbrella funds, the Old Mutual SA Retirement Gauge 2022, which incorporated data from approximately 500 000 members across pension and provident funds. Amongst many others, the study provided fascinating insights into the costs members have been paying for risk benefits and how they impact their retirement savings.

Watch this video and see Nceba Pupuma, principal consultant at Old Mutual Corporate Consultants, discuss:

• the different but important roles retirement funds play in members’ lives
• what the study revealed around the Covid pandemic and risk cost contributions
• how these costs impact retirement savings
• what the future of risk benefit rates currently looks like and whether they’re more likely to go up, or down.

For more insights, read or download the entire Retirement Gauge in pdf format here.