Share
Sanlam on how COVID-19 has impacted the retirement industry
Sanlam has conducted its 40th Benchmark Survey. And the latest research has shown the deep impact of Covid-19 on the retirement industry – with suspended contributions, fewer fund members, and a greater focus on wellness. Joining CNBC Africa to discuss the key findings is Avishal SeetHeh, Head of Sanlam Umbrella Solutions.
Tue, 22 Jun 2021 15:58:17 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The pandemic has led to a significant increase in group risk claims and suspension of contributions to retirement funds, resulting in reduced retirement savings and membership.
- Many individuals opted to cash out their retirement benefits during the pandemic, potentially jeopardizing their long-term financial security in retirement.
- Retirement benefit counseling has played a crucial role in guiding members to make informed decisions about their investments and retirement savings, leading to better outcomes during the crisis.
The retirement industry has been significantly impacted by the COVID-19 pandemic, with suspended contributions, fewer fund members, and a heightened focus on financial wellness, according to the latest findings from Sanlam's 40th Benchmark Survey. Abishal Seet, Head of Sanlam Umbrella Solutions, recently joined CNBC Africa to discuss the key insights from the survey and shed light on the challenges faced by the industry. The pandemic has had a multi-faceted impact on the retirement sector, particularly in terms of group risk claims. Sanlam has seen a substantial increase in group risk claims, including funeral and death claims, which have persisted through multiple waves of the virus. The loss of life due to COVID-19 has not only been a human tragedy but has also affected group risk claims significantly. In addition to the human toll, the pandemic has also disrupted general retirement savings. The survey revealed that one in three standalone funds and many employees participating in umbrella funds suspended contributions for four to five months, leading to a reduction in retirement savings. The economic fallout from the pandemic, including business closures and retrenchments, has further exacerbated the savings crisis, resulting in reduced membership and employment opportunities. While the economy is showing signs of recovery, with an increase in contributions to retirement funds, the impact of cashing out retirement benefits to offset income loss during the pandemic is substantial. Many individuals chose to withdraw their retirement savings when facing retrenchment or company closures, which can have long-term repercussions on their financial security in retirement. However, there have been positive developments as well. Retirement benefit counseling has proven to be effective in helping members make informed decisions about their investments and retirement savings preservation, leading to better outcomes during the COVID-19 period. Despite the challenges, there is hope on the horizon, with a gradual normalization of retrenchments and a slight improvement in the overall economic outlook. The future trajectory of the retirement industry will largely depend on government interventions to manage the third wave of COVID-19 and its potential impact on the economy and employment. As the industry navigates these uncertainties, it is crucial for stakeholders to prioritize financial wellness and long-term savings planning to ensure a secure retirement for all.
SIGN UP FOR OUR NEWSLETTER
DAILY UPDATE
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.