The 2018 Mercer pension index found that South Africans receive on average the lowest income in retirement among countries with a functioning pension system.
That along with a strained economic environment with already low levels of savings where consumers are feeling the pinch with VAT and petrol increases. Rising price of electricity, education and food are constant reminders of how increasingly difficult it is to make ends meet today, let alone save for the future.
Many South Africans face tough decisions or serious adjustments to their lifestyles to survive their golden years. People often reach retirement age before realising that there just isn’t enough to carry them through for the next 20 to 30 years.
(The reforms currently being looked at by government with an aim to address some of the problems is that) Currently Government Employees Pension Fund (GEPF) announced that an annual pension increase of 5.2% to its pensioners with effect from 1 April 2019.
As stated in the GEPF press release: “The GEPF has granted this increase to enable pensioners to keep up with rises in inflation.
The pension increase is based on the 5.2% inflation rate for the 12 months ending 30 November 2018 released by Statistics South Africa on 12 December 2018 thus making the increase equal to 100% of Consumer Price Index (CPI) and higher than the 75% of Consumer Price Index (CPI) provided in terms of GEP Law and Rules.”
The GEPF is for those employed in South Africa’s public sector who are entitled to membership of the GEPF, which is Africa’s largest pension fund.