What we wanted the Benefits Barometer series to do was to tell a story. Because each member of a pension fund is a person. And that person has hopes and dreams and things that keep them up at night. The Benefits Barometer is about telling their story, and that story is so much more than just a replacement ratio. We started off by using the data we had about them and the choices they made to better understand what they valued, what their future might hold and risks that they faced.
We then took a step back and looked at the different ways that individuals can meet their goals and protect themselves. And we realised that this wasn’t a neat menu. This was a highly complex system and it was broken.
If I were a driver for a company and I was involved in a motor vehicle accident on duty, I could claim from Compensation for Occupational Injuries and Diseases (COID), the Road Accident Fund, my union’s disability income product, the Unemployment Insurance Fund (UIF), sick leave from my employer, a hospital cash plan that I bought through my church and the medical aid that employer forces me to join.
But, let’s paint a different picture. I have a child who I want to make sure gets a good education because I expect them to take care of me in my old age. Here I am on my own.
I have schooling provided by the state and I could get an education policy but my options are very limited, particularly as I have to save for retirement and pay a mortgage at the same time.
So, there are also holes in this rather bewildering system as well as a huge amount of duplication.
Apart from the fragmentation in the system, we were also aware that the individual faced issues that stood between them and a system that worked for them. We looked at things like:
- our retirement ages, which are 150 years out of date
- incentives to save that simply don’t work
But the more we looked at it, the more we realised there was a bigger problem: a complete disconnect between what the members wanted from life and what the retirement benefit system was giving them. They were making choices that made sense in terms of their lives as a whole but which didn’t make sense if we considered only their retirement funding. We understood that unless we could understand that person’s story and started to address what the individual really wanted, we were never going to get compulsory retirement savings to succeed.
