Advertise Here


IconAlternative Investments
IconAsset Managers
IconAssociations and Institutes
IconBBBEE Consulting and Verification Agencies
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconFinancial Planners
IconInvestment Consulting
IconLinked Investment Service Providers
IconListed Equities
IconOnline Share Trading
IconParticipation Bond Managers
IconProperty Unit Trusts
IconRegulatory Authorities
IconStock Exchange
IconUnit Trust Fund Managers
IconWellness Programs
Advertise Here
  Subscribe To »

ASISA Media Statement: Green Paper on Comprehensive Social Security and Retirement Fund Reform






The Association for Savings and Investment South Africa (ASISA) has taken note of the Green Paper on Comprehensive Social Security and Retirement Reform published yesterday by the Minister of Social Development, Lindiwe Zulu, for comment by 10 December 2021.

A Green Paper is a government policy discussion paper that details specific issues and then points out possible courses of action in terms of policy and legislation. It is a precursor for a White Paper, which details a government policy position that has been approved by Cabinet.

ASISA, as part of a Business Sector task team, has been engaging with Government and social partners at the National Economic Development and Labour Council (Nedlac) for the past four years on a 2012 Discussion Document on Comprehensive Social Security and Retirement Reform.

Dr Stephen Smith, a senior policy advisor and member of the ASISA Social Security Standing Committee, says that the core proposals set out in the Green Paper are not new and have been the subject of discussion and debate for almost twenty years.

He notes that the Green Paper contains significant proposals to streamline and restructure the social security system. “These are complex and wide-reaching reforms, which will not result in immediate change. It is essential that members of the public have an opportunity to comment. ASISA therefore supports the consultative process being followed by the Minister.”

Smith says the Green Paper identifies three areas within the public social protection system that are lacking: a basic contributory state pension, statutory health insurance, and adequate income security for those aged 18 to 59 years of age.

He says it is important that future social security reform programmes build on, rather than disrupt, the existing contractual savings and life insurance arrangements of both public and private sector employees. “It is these savings pools that finance much of the country’s investment requirements and fund South Africa’s capital market.”

Smith points out that a better integrated social security system requires that a balance is achieved between different components. “For example, a state pension which is used to pool and subsidise risks between workers has to be balanced against what proportion of income remains for the funding of an adequate pension related to an individual’s accustomed standard of living.”

He says much of the document will therefore have to be weighed with reference to how scarce individual and state resources are optimised on an affordable and sustainable basis. According to Smith, this implies providing those most at risk with solutions first. “Existing contributors are already struggling to preserve what they have accumulated, asking for access to their long-term retirement savings.”

Smith notes that the National Social Security Fund (NSSF) is proposed as a defined benefit scheme and will pay benefits on a partially funded basis. “This means that today’s contributors have a percentage of their contributions used to fund those who have retired. The interests of the future young need to be protected against what is viewed by our actuaries as a strong likelihood of ever-increasing contributions to fund benefit promises.”

He adds that it is important to have clarity on how the promises embedded in the design of the NSSF system will impact on the fiscus.

According to Smith, it needs to be ensured that future social security reform programmes do not inhibit employment creation. “A job is still the best form of security. Social security is a safety net when all else fails.”

Smith comments that the Covid-19 pandemic and the consequences of the economic lockdown have highlighted the urgent need for the appropriate social protection, particularly of informal and vulnerable workers. “We need solutions to provide protection for these workers to provide support through unemployment and saving through to retirement as existing legislation and structures are not designed to cater for their needs. ASISA sees this as the most urgent issue to solve.”

Smith says ASISA remains committed to working with government and other stakeholders on achieving a good outcome for all South Africans. “The Covid-19 pandemic has once again shown how much can be achieved when government and the private sector work in partnership and we believe that together we can design an effective social security and retirement system.”


Source: Association for Savings and Investment South Africa (ASISA)
« Back to previous page Print this page » |

Breaking News »

To have and to hold a signed Will

National Wills Week will be held from 13 to 17 September 2021. This is an ideal opportunity to draft a Will or to review an existing Will. In recent times, we have come to realise that death can happen to ...
Read More »


Covid-19 Vaccine Distribution Risks and Insurance: Q&A with Allianz Specialists

As COVID-19 vaccine distribution rolls out across Africa and the world, insurers of the pharmaceutical industry are in a position to share their experience as to what constitutes a successful and safe distribution ...
Read More »


The Female Economy – what women want from a financial adviser

As women earn and control an increasing portion of wealth, advisers must reconsider how they engage with this group or risk losing the opportunity to serve them. This will take more than just falling back on reductive ...
Read More »


Life insurers report significant increases in funeral insurance fraud for 2020

South African life insurers reported a 12% increase in fraudulent and dishonest claims across all lines of risk business in 2020 when compared to 2019. The 2020 fraudulent and dishonest claims statistics, released ...
Read More »


More News »


Healthcare »


Life »


Retirement »


Short-term »

Advertise Here
Advertise Here

From The Glossary »



Provisions in a policy or treaty that excludes certain types of risk from coverage under the policy or treaty. Two of the more common exclusions are in connection with aviation and war (e. g. ‘insurance is payable upon death except if resulting from piloting an airplane’).
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2021. All Rights Reserved.