Dramatic changes in medical science and a general improvement in living
standards has led to significant reduction in the morality rate of certain age
groups in South Africa. As a result the average age at which people are likely to
die increased significantly in the 2oth century.
The implications of this has not only to increase the number of people who
survive to retirement age, but it has also seen larger numbers of people live for
much longer periods in retirement.
Opposite to the above, is the HIVIAids pandemic, which will increase the
mortality rates of individuals at a younger age and undoubtedly affect pension
plans and the costs thereof. The effect of all these changes have been the
ultimate cost of providing a given pension benefit.
At first the paper examines the trend in retirement saving away from Defined
Benefit (DB) towards Define Contribution (DC) funds. It looks at the reasons why
this shift has occurred in South Africa, and provided confirmation of the
retirement savings plans away from DB structures and towards DC type of plans
in South Africa.
Secondly the paper briefly looks at the operation of DC plans in South Africa. The
potential consequences of the shift are then reviewed in the context of roleplayers
in the retirement savings decision and personal involvement in retirement
planning process.
Upon completion of the literature study, a model was developed in which data
from DC funds were used to make projections regarding the sufficiency and
adequacy of funding within DC funds.
This study has proved that the shift from DB to DC funds had an enormous
impact on provision for retirement. It was found that a significant part of the
population will not be independent at retirement and therefore might potentially
became a responsibility of the state.
The paper suggests that the level of personal involvement in the retirement
savings decision may be a critical factor in determining the propensity of an
individual to save for retirement. As a result research is proposed to consider the
importance of the three elements in the involvement of the individual in the
retirement savings decision: the perceived ownership of retirement savings, the
awareness of the need to save for retirement and the understanding of how to
save for retirement. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2004.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nwu/oai:dspace.nwu.ac.za:10394/105 |
| Date | January 2003 |
| Creators | Bekker, Francis |
| Publisher | North-West University |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
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