HIV/Aids impact 'dramatic'
2008-08-26 16:01
Special Report
A new digital media service will foster the global collaboration of physicians and help them to share the latest advances in Aids and other virus research, its promoters say.
Johannesburg - The financial impact of HIV/Aids on the proposed National Social Security Fund will be dramatic, with actuarial models showing that the average 20-year-old South African will not even reach retirement age.
This is according to the Institute of Retirement Funders (IRF) on Tuesday at conference in Durban.
"With just half of the one million South Africans needing ARV-treatment now, the critical balancing act required to support people through short term financial needs while encouraging them to save towards retirement has become glaringly apparent," said Nathea Nicolay, manager of Aids Risk Consulting for Metropolitan's Employee Benefits in a presentation at the IRF conference.
The actuarial specialist said the average 20-year-old South African was expected to live another 36 years, which meant they would not reach the retirement age of 60/65.
"Life expectancy could drop even further unless the government invests even more in HIV-prevention and treatment, thus saving the fiscus billions in the long term."
Nicolay was asked to speak on the impact of HIV and Aids on the proposed National Social Security Fund (NSSF) aimed at broadening the retirement savings net in the country.
Death vs retirement benefits
"The big question is how to design a social security system that balances the provision of death and disability benefits on one hand and retirement benefits on the other hand in a country where the average life expectancy at birth is 51 years," she said.
Government was trying to catch a huge group of low income earners who cannot afford current medical aid or current retirement fund benefits, in a massive social security net, when many of them "might not even make 50", she said.
The full impact of HIV/Aids on this group of people, many of whom were self employed or belong to small companies, had never been assessed.
Most needed was a broadening of social security while encouraging job creation and protecting the disposable income of poor households.
Nicolay warned that any social security financing arrangement which radically disrupted the financial protection that the poor had through current savings arrangements would cause panic.
There had been "a huge outflow" of money in the industry, partly due to poor communication on intended social security reform.
People were worried that they would be forced to take out annuities in future and be prevented from withdrawing their retirement savings for life crises when they left their employer.
"South Africans often withdraw their savings before retirement to educate their kids, provide income in times of illness and death or buy a small business. Fear of not having access to these savings in future is currently worsening the outflow," she said.
This was aggravated by HIV/Aids and the accompanying stigma, fuelling unemployment and draining 34% of household expenditure in affected families, Nicolay said.
- SAPA