Women-only pension fund due to launch soon

THE Women’s Retirement Fund should be up and running before the end of September, says Gloria Serobe, the chairperson of the presidential working group on women.

The initiative will see many women, who would otherwise not belong to a fund, belong to a retirement scheme that caters for their unique needs.

The fund will also provide a safety net for women who are trapped in poverty because they don't have enough savings on which to rely during retirement.

“We are now finished with the crucial elements of the fund. We plan to start running in the third quarter of this year,” Serobe says.

This announcement follows a meeting the presidential working group had with President Thabo Mbeki on August 7 at the Union Buildings.

The group consists of women from business, labour organisations, non-governmental organisations and the South African Domestic Workers’ Union.

According to Serobe, the agenda of the fund is twofold – to harness the collective power of current retirement savings of women and to create a greater role for women in the management of retirement funds.

Research shows that about a third of the trillion rand invested in retirement savings belongs to women but less than 10% of retirement fund trustees are women.

Serobe says the fund will be focused on significantly improving social security and retirement provisions. The fund will also look at designing benefit structures that suit women.

The fund plans to expand the savings net to vulnerable groups such as domestic workers, seasonal workers and women in rural areas.

The announcement of the fund’s launch takes place as financial services company Alexander Forbes released a study that shows many women will reach retirement without sufficient savings to see them through their retirement.

Rowan Burger, head of consulting strategy at Alexander Forbes, says the reasons for this include:

Women change jobs more often, which raises the temptation to cash out the pension instead of preserving it. If they take the pension payout, this means that they would have to make do with lower payouts when they retire.

Women take time off to give birth and become caregivers to children. During this time, they are not contributing towards retirement savings.

In line with longevity trends, women tend to live seven years longer than men. At retirement, they get paid lower benefits than men. They also tend to retire earlier than their male counterparts.

Burger says as the country goes through retirement savings reforms, there is a need to pay attention to women’s specific needs.

Research shows that in South Africa, 31% of people who reach retirement age have to continue working, 47% are dependent on their family, 16% depend on the government pension fund and only 6% will be financially dependent.

Burger says people need 30 years of service, saving 15% of their salary, in order to live retire comfortably at 65.

The challenge is for women to strive for financial independence.

“The reality of the world today is that women should learn to be financially independent from men,” Burger says.

In his online newsletter to mark the month for women (August), Mbeki wrote: “We must take care to ensure that women are integrally involved and targeted in the design and implementation of our economic empowerment programmes.

“As a section of society who, despite comprising more than half of our people, continue to confront additional economic disadvantages, all our programmes need to have a capacity to benefit and empower women.

“This will only be achieved by involving women in the process and ensuring that they are able to help direct and monitor all the work in this regard.”

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