According to Gerhard Joubert, head of Group Marketing and Stakeholder Relations at PPS, this is the highest value recorded for this question since the inception of the survey in January 2011. "Professionals clearly feel that compulsory retirement saving is needed in order to ensure a more stable financial future for the population."
Nick Battersby, chief executive of PPS Investments, says it is very encouraging to note that professionals appreciate the value of a dedicated, consistent savings approach throughout their careers in attaining a secure retirement. "A failure to preserve accumulated retirement savings when leaving an occupational retirement fund means that investors have to start saving for retirement from scratch, and now have less time to save. Because they will be taxed on this withdrawal, they also lose a fair chunk of their savings."
By transferring their accumulated retirement savings to a preservation fund, they avoid an immediate tax implication (they will only be taxed upon retirement), says Battersby. "This means that their full savings amount can be reinvested to generate further returns." The survey also revealed that 61% of respondents think they have enough to retire comfortably - the highest result recorded for this question over the past 15 months.
In other results, the survey revealed an overall decline in confidence across a number of critical socio-economic issues. Confidence that unemployment will improve over the next five years fell one percentage point quarter-on-quarter as well as year-on-year to 38%.
"Given the recent Statistics SA findings that formal sector employment dropped by 28,000 jobs in the second quarter of 2013, it is not surprising that professionals are feeling less confident in employment improving in the next five years. It is not possible to improve unemployment while so many jobs are being lost," notes Joubert.
Tied to low confidence in employment, is the drop of confidence in the standard of education improving over the next five years to 45%, a one percentage point decline. The key to creating more jobs is to improve education, says Joubert. "Basic Education Minister Angie Motshekga recently revealed that South Africa's public schools had 7,076 unqualified and 2,642 under-qualified teachers; the goal of improving education cannot realistically be achieved while this remains the case - a solid primary educational foundation is key to long term higher education success."
