Ours is a voluntary tax incentivised savings system. Employers have a choice to enroll their employees in the system and with greater member choice, employees decide their level of savings. A measure of the success of the system would also be the extent to which the working population is covered and whether the benefits delivered are adequate.
From the 2018 National Treasury tax statistics we can observe that there are only 4.7-million in the system of some estimated 16.5-million workers. We also see that contribution levels average 11% of taxable remuneration dropping down to only 2% for the top earnings category. This clearly indicates the current system misses its mark in terms of coverage and delivery of outcomes. (It is broadly accepted a 15% of salary retirement savings level appropriately invested for 40 years will deliver an adequate retirement income).
Instead of further focus on incremental cost efficiencies that could be achieved by funds, it is time to take a broader view of how to solve our problems:
Much has been achieved over the last decade to achieve better retirement outcomes, however the reality is that without a broader focus and the need for a few more bold reforms our system will remain sub optimal.