Old Mutual South Africa (OMSA) has
launched what it claims is the country’s largest multi-employer
umbrella pension fund, the Old Mutual SuperFund.
Aiming to drum up business in South Africa’s
pension market, OMSA Corporate umbrella fund product manager Hugh
Hacking said the fund initially has 300,000 member accounts from
some 5,000 employers.
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Hacking said the appeal of umbrella funds for
employers lies primarily in enabling them to transfer
responsibilities of fund administration and trusteeship to a fund
management specialist. There is also a high degree of satisfaction
amongst employers who have transferred their workplace pension
scheme to an umbrella fund, he added.
This was indicated by a recent industry study,
Old Mutual Retirement Funds Survey 2010, which revealed
that 97% of respondents who were part of an umbrella fund felt
their expectations were being met. Of respondents not yet using an
umbrella fund, 53% believed that umbrella funds will continue to
grow strongly.
Hacking continued that there is significant
growth potential in South Africa’s workplace pensions market. This
he said was highlighted by OMSA’s Old Mutual Retirement Monitor
2010 study of employees in the top-five income brackets which
found that 57% are members of a pension or provident fund.
Of employees who are members of a workplace
scheme, 42% also contribute to a private retirement plan. Of
employees who are not members of a workplace scheme only 25%
contribute to private retirement plan.
The OMSA study also found that half of
employees who are not members of retirement funds said they would
definitely join if it was offered by their employer.
Hacking said as part of its strategy of
targeting businesses that currently do not offer retirement
benefits to staff OMSA has introduced Easy Benefit Plan (EBP).
“We have tried to make it easy to
purchase, activate and administer, with businesses also receiving
o¬ngoing support as well as free access to advice from an
employment law web-based service,” said Hacking.
EBP offers employee benefits such as life and
disability cover, family funeral cover as well as a retirement
savings vehicle without any medical underwriting. To be eligible
for EBP, a business must employ five or more staff and have access
to the internet.
