Conclusion
The implications for employee benefits
By placing employee benefits into the wider context of social protection, it becomes apparent that this isn’t simply about maximising replacement ratios, death cover multiples or medical cover. It’s about something far more holistic and inclusive. It’s about an individual’s physical, mental and financial health. Essentially, the role of a retirement fund is to:
- Provide an income in retirement.
- Provide benefits to dependants or members should a member’s income generation cease.
- Invest assets in a way to ensure that the member can retire in a world where the quality of life and quality of the environment are worth something.
While these points link retirement funds directly to the social protections envisaged in the constitution and the NDP, they play an even bigger role.
Social protection exists to look after the household, and by doing so, serves its purpose for society. Acknowledging this should profoundly change how we view employee benefits. Getting employee benefits right isn’t about being nice to employees, it’s about safeguarding the future of our society.
The challenge is that employee benefits is only one element of social protection. At present, South Africa’s system is not comprehensive and while there are initiatives underway at a government and society level to improve social protection, they are likely to take some time.
In the interim, much can still be done to improve the employee benefits component, and in 'The way forward'to improving employee benefit engagement: We will explore some of the options that do exist. In designing these solutions, we always need to keep in mind the broader fabric of social protection, ensuring that employee benefits add to and don’t subtract from the protection households have.
We also need to keep in mind protections that are provided by the other elements of the system – the government and broader society, through families and communities. In doing this, the private sector – employers and financial services companies – can make a meaningful contribution to improving protection for households. What we need to be wary of are changes that improve employee benefit outcomes – replacement ratios or death cover multiples – at the cost of other forms of social protection.
We can’t neglect the bigger picture.